Navigating the Complexities of Employment Immigration in the Life Sciences Sector

An OBN survey earlier this year found that 90% of businesses in the sector were experiencing skill shortages, and in our experience this has continued throughout the year. 
 
The Life Sciences sector contributes nearly £10.5 billion to the Scottish economy, and if this is to continue to grow it is vital that the number of shortages across the industry are reduced. While many in the industry are investing in training programmes to ensure a pipeline of future talent, in the short-term businesses need to recruit skilled workers now, and changes to the Immigration Rules earlier this year have made it more difficult to do so internationally. 
 
Changes to the Immigration Rules earlier this year, have made recruitment from abroad more expensive for businesses, as in April 2024 the Home Office:

• Increased the minimum salary for Skilled Worker visas to £38,700 from the previous level of £26,200.
• In some roles the required salary can be higher due to the going rate for the role, and the Home Office changed the definition of "going rate" from the 25th percentile of equivalent UK salaries to the median of equivalent salaries. In some cases, this has led to significant increases.

Removing the shortage occupation salary discount which reduced the required salary level of many life sciences roles. 
 
As an example of the effect of these changes, the usual salary levels required to qualify for a work visa in several roles in 2023 compared to 2024 are set out below:

Many of the immediate shortages in the industry would now require significant salary increases to qualify for work visas and this made recruitment more difficult for businesses. 
 
Away from salaries, recruiting from abroad requires the business to have a sponsor licence from the Home Office, and to meet other costs such as the Immigration Skills Charge. A small business, recruiting someone from abroad for the first time, is likely to face a minimum cost of more than £1,800 to obtain and use a licence, and in a competitive market for talent they may also have to commit to paying the visa costs for the individual which would take the total cost for a three-year visa to more than £5,500. 
 
Furthermore, many existing workers in the sector hold Graduate visas and will require sponsorship if they are to remain in the UK beyond the end of their current visas, so even businesses who do not look abroad for talent may find themselves dealing with the increased cost of sponsorship.

As a result of this, we are helping a number of businesses in the sector with:

• Salary mapping exercises comparing their current salary bands to the visa levels. This helps identify roles where recruitment of international workers is possible, and areas where salary bands may need to be reviewed.
• Implementing clawback policies relating to visa costs. Some costs cannot be passed to a visa applicant, such as the Immigration Skills Charge, but individual visa costs can be reclaimed in certain circumstances. These agreements require detailed employment law advice to ensure they are enforceable and consistent with the law.

Sponsor compliance audits. For those businesses with a licence, and a reliance on international talent, the nightmare scenario is a compliance failure resulting in the licence being revoked. This would prevent future recruitment but also mean existing sponsored staff can no longer be employed. 
 
Of particular importance to the sector is the ability to protect confidential information when employees move on elsewhere, and to do so in as robust a way as possible. One way of protecting such information is by including restrictive covenants in employment contracts. Whilst non-compete covenants are being closely considered by competition authorities in other jurisdictions, this appears not to be the case in the UK.  Whilst the previous Government had been contemplating a change by restricting the length of non-compete covenants to a maximum of three months, this has not featured in the latest proposed employment law changes being advanced by the Labour Government in what has been hailed as "the biggest upgrade to workers' rights in a generation". For the Life Sciences sector, this means that, if the investment is made in sponsoring foreign workers, there can still be some control exerted upon what that employee does next. 
 
Our specialist team have a great deal of expertise working with life sciences businesses and can help with any immigration or employment law challenges they are currently facing.