Groups representing UK startups have written to the Home Office calling for the government to rethink changes to the Skilled Worker Visa.
The Skilled Worker Visa allows workers to come to the UK if they work for an employer that’s been approved by the Home Office, have a certificate of sponsorship from that employer with information about the role, and occupy a role that’s on the list of eligible occupations.
However, they must also be paid a minimum salary - and this has been increased, prompting concerns that the changes may create challenges for organizations seeking overseas talent.
"It’s time to turn off the taps and end the flow of cheap workers from abroad. Mass migration is unsustainable and it’s simply not fair. It undercuts the wages of hard-working people who are just trying to make ends meet," said home secretary James Cleverly last week.
"We are refocusing our immigration system to prioritize the brightest and best who have the skills our economy needs, while reducing overall numbers."
Two lobby groups, the Startup Coalition and the Entrepreneurs Network, are now calling for the government to reconsider the move.
Salaries were previously set at the 25th percentile for Annual Survey of Hours and Earnings data, but have now been upped to the 50th percentile. This means a startup hiring a software engineer will now be required to pay a minimum salary of £51,000 if they choose to employ a non-UK national, the groups noted.
"The ability to meet these new salary requirements may not be feasible for early stage startups, who cannot always pay their workers high wages at the outset."
Many startups offer early stage employees equity stakes in their businesses as part of their compensation packages, reducing the salary element - which may then fall below the threshold.
"Startups need staff with the right skills to develop and execute innovative ideas. They often compete with larger, more established companies for talent too – yet these changes could see dynamic startups miss out on the skills they need, while established tech giants will be unencumbered by them," the letter reads.
"Startups based outside of London, where data shows tech salaries are lower, will be disproportionately impacted by these changes."
The groups call for the government to tweak the requirements so that equity can be counted towards the salary requirements for the Skilled Worker Visa. This, they said, would give a more accurate reflection of an employee’s total compensation package and ensure that startups aren't unfairly disadvantaged in accessing talent.
