How has the hospitality industry been affected by the new immigration system?
The hospitality industry has been hit hard by the combination of Brexit, COVID-19 and the new immigration system. These recent changes have lowered the availability of overseas workers and the UK is heavily reliant on overseas workers in the hospitality industry. This has left the hospitality industry with a skills shortage and there are increased costs for hospitality businesses. This has led to a rise in job vacancies and the hourly rates for jobs in the hospitality industry.
Brexit and the end of free movement have reduced the availability of lower-skilled EU workers in the hospitality industry. EU workers make up approximately 37% of workers in the hospitality industry. Some EU workers may not have wanted to return to the UK or did not meet the eligibility requirements for settled status or pre-settled status. EU citizens are subject to the same rules as the rest of the world from 1 January 2021. EU citizens already living in the UK must have applied for the EU Settlement Scheme by 30 June 2021.
COVID-19 meant that many overseas workers in the hospitality industry returned to their home countries after they were placed on furlough or were made redundant. The Office for National Statistics reports that 335,000 workers in the hospitality industry have left their jobs and returned to their home countries. This has created a problem where many workers are unavailable now that the COVID-19 lockdown restrictions are easing. Many of the workers have been scarred by the unexpected changes in lockdown restrictions which have pulled them in and out of work at short notice. There have been targeted government support measures that have failed to revive the hospitality industry. For example, the Eat Out To Help Out Scheme, grants, business relief rates, VAT cuts and reduced administration to operate outdoors. There are ongoing challenges due to the ‘pingdemic.’ The government’s handling of COVID-19 has meant that workers have left the hospitality industry for industries that present greater stability.
The New Immigration System
The new points-based immigration system was launched on 1 January 2021. The new salary threshold for skilled workers has been lowered from £30,000 to £25,600. This is likely to include hotel managers, bar managers and restaurant managers. However, this is unlikely to include kitchen staff, kitchen porters, baristas and cleaners. The majority of the workers in the hospitality industry are considered ‘lower-skilled’ and earn less than £25,600. The calculation fails to account for the nuances of the hospitality industry, such as tips. The new immigration system has not introduced a lower-skilled work visa or created an industry-specific hospitality visa. The lack of immigration work visas for overseas workers means that there are fewer workers available to carry out lower-skilled work in the hospitality industry. The government is reluctant to ease the new immigration rules and urges the hospitality industry to improve its conditions and increase its pay.
An application for a sponsor licence to sponsor overseas workers on a skilled worker visa can be made if the business cannot hire a sufficient number of UK workers. Sadiq Khan, Mayor of London, proposes a time-restricted COVID-19 recovery visa, distinctive requirements for London and a regional shortage occupation list for London to help hospitality businesses hire overseas workers. The government can fix the shortage in the hospitality industry by reducing the salary thresholds, introducing a lower-skilled work visa or placing more jobs in the hospitality industry on the shortage occupation list.
How can NA Law Solicitors help?
Our team of expert solicitors are here to give you advice on how to hire overseas workers and make a sponsor licence application. Contact us and arrange a consultation with us today to discuss how the new immigration system may affect your hospitality business.