The Impact of the New Skilled Worker Minimum Salary Threshold

From 9 April 2025, the UK government increased the minimum salary threshold for Skilled Workers from £23,200 to £25,000 per year (from £11.90 to £12.82 per hour, based on a 37.5 hour week). This change applies to new visa applications and visa extensions submitted after this date. The update also means that employers hiring Skilled Workers will need to ensure they are meeting this salary threshold for their visa holders. However, this adjustment has the potential to create pay disparities within organisations.

Within this article we refer specifically to those in Carer and Senior Carer roles. For advice and support in relation to other roles, the rules and complex and therefore, please do not hesitate to contact a member of the AfterAthena Team who can offer 30 minutes of free advice to QCS clients.

Key Considerations

The issue arises because, as of 1 April 2025, the National Living Wage (NLW) for workers aged 21 and over also increased to £12.21 per hour. This is a significant shift, as the new Skilled Worker pay rate of £12.82 per hour is now above the NLW.

Employers in the care industry will face the challenge of managing this discrepancy in pay between workers on Skilled Worker visas and their other employees who are British nationals or foreign nationals without Skilled Worker visas.

In particular, care providers may find themselves in the position of having to decide whether to pay workers doing the same job (e.g. Carers and Senior Carers) at different rates, depending on their immigration status. The decision of whether to maintain a uniform pay rate for all care staff or differentiate based on visa status will have serious implications for both the business and the employees involved.

Risks of Paying Different Rates to Skilled Worker and Non-Skilled Worker Employees

1. Discrimination Claims

While the Home Office requires certain minimum pay rates for Skilled Workers, this is unlikely to act as a sufficient defence to a race discrimination claim, if an employee who is not Skilled Worker challenges the pay disparity on the grounds of race, nationality, or immigration status. For example, an employee might claim that they are being paid less purely because of they are a British national (and therefore, do not require a Skilled Worker visa to work in the UK).

This could lead to costly legal battles, with the risk of reputational damage to the business and the erosion of employee morale.

2. Employee Relations Issues

Pay, while generally discouraged as a topic for open discussion, is often a subject of conversation among colleagues. The higher public visibility of Skilled Worker visa salaries, coupled with increasing pressure from staff, could lead to dissatisfaction and unrest in the workforce. Employees receiving the lower National Living Wage rate of £12.21 per hour may feel undervalued, especially if they are performing the same duties as those earning £12.82 per hour under a Skilled Worker visa.

If this pay discrepancy causes friction, employees might voice concerns, either formally or informally. It’s vital for employers to be prepared for these types of conversations and address concerns with sensitivity. Employers should be able to offer reasoning for the discrepancy, which may include the visa requirements for Skilled Worker employees.

Recommended Approach: A Unified Pay Structure for Care Roles

To mitigate the risks outlined above, it is strongly recommended that employers consider aligning the pay for all Care or Senior Care roles to the higher minimum pay rate of £12.82 per hour, regardless of visa status. By doing so, businesses will:

• Reduce the risk of discrimination claims by offering uniform pay across the workforce, the appearance of inequity based on immigration status or nationality will be reduced
• Promote better employee relations by treating all staff equally and avoiding dissatisfaction among employees earning the lowest wages
• Create a simple pay structure, which is easier for employees to understand and for employers to manage, reducing the likelihood of confusion or disputes over pay differences

Additional Considerations

Employers should also be aware of the implications of failing to comply with the updated salary thresholds for Skilled Workers, including the suspension or revocation of a sponsor’s licence, even if an error was unintentional. In the worst-cases, this could disrupt the employer’s ability to recruit and retain non-UK skilled workers, negatively impacting business operations and care delivery.

Conclusion

With the difference in minimum salary thresholds for Skilled Workers the National Living Wage, employers in the care sector need to carefully consider how they structure pay for their employees. While it may seem tempting to pay Skilled Workers a higher rate than other staff, the risks of potential legal challenges, employee dissatisfaction, and damage to workplace morale should not be underestimated. By aligning pay across the workforce and paying all employees in Care or Senior Care roles at least £12.82 per hour, employers can reduce these risks and promote fairness and transparency within their organisations.