With the government proposing a significant overhaul of the rules governing earned settlement status for migrant workers, Joanne Hennessy, partner and head of business immigration at law firm TLT, examines the potential impact on recruitment and the steps construction firms can take to manage cost and risk
In the UK today, acquiring settled status is a key milestone for many migrant workers. It provides indefinite leave to remain and the right to work freely, as well as removing any ongoing sponsorship costs or responsibilities for their employers if they were on a work visa.
However, the government is planning a significant overhaul of the route to permanent residence by introducing a new system of “earned settlement”. In an industry like construction, where 16% of workers are born outside of the UK (ONS, 2025), these changes are certain to have a major impact on employers.
What the proposed changes consist of
The new earned settlement rules are set to increase the baseline qualifying period from five years to 10. This baseline can go up or down depending on the applicant’s personal circumstances. For example, high earnings and advanced English language skills may lower the baseline, whereas negative factors like unlawful entry or overstaying a visa may increase the time period.
Those earning over £125,140 over three consecutive years would be eligible to settle – assuming they have no adverse factors – with those on over £50,270 having to do so for five. Construction project managers, which are classified as “highly skilled”, may be able to reduce their settlement period even while on a low earnings bracket, for example through volunteering, although further details on the mechanics of that are still awaited.
Consideration is also being given to a 15-year baseline qualifying period for workers in lower skilled roles, which will be a significant concern for many.
The reforms also introduce significant changes for the dependants of workers. Under the new proposals, adult dependants would have their own qualifying period assessed based on their personal circumstance, contribution and compliance, and would have to have evidence of minimum earnings to trigger National Insurance contributions. This means that, under these new rules, adult dependents could end up qualifying for settled status earlier or later than the main applicant.
Crucially, the government has indicated that these changes could apply not only to future arrivals but also to workers already in the UK who have not yet secured settled status.
Without transitional provisions, the impact would be significant. A consultation on many elements of the proposed changes has closed, and we await the government’s response to that.
The practical impact on recruitment and retention of labour for employers
The foremost impact this will have on employers is longer periods of sponsorship for visas. An employer who may have believed they were facing at most five years of cost and compliance at the start of an employee’s sponsorship could now be paying double.
The prolonged sponsorship window will also leave the employer and employee restricted to the specific role they were sponsored for, with less freedom and flexibility to change roles than non-sponsored employees have.
The longer pathway to settlement may well make it more challenging for construction businesses to retain and attract talent in the UK. Alongside having to wait longer periods to settle, applicants with families may be put off by the uncertain pathway dependants now have, undermining the UK’s appeal as a place to build a long-term career in construction.
Furthermore, tying faster settlement to earnings is also likely to intensify competition for skilled roles, increasing wage pressure. Against the backdrop of free movement and clearer settlement routes in the EU, this could weaken the UK’s appeal to experienced construction workers, leading to higher turnover and more frequent recruitment.
The steps construction businesses should consider now to manage cost, risk and access to skilled workers
Unhelpfully, we don’t currently know when these changes will be implemented and what the final rules will look like. While the reforms were originally slated to come into effect in April, the timeline has shifted and employers should keep an eye on developments over the coming months.
The first step should be to review any employees who are on time-limited visas. If any are imminently eligible to apply for settlement, they should be encouraged to do so at the earliest opportunity to try and avoid rule changes.
For sponsored workers who are still some distance from settlement, employers may want to consider the length of any visa extension, taking earnings into account. In some cases, a longer extension could reduce overall costs by avoiding repeat sponsorship.
It will also be important to help reassure workers, many of whom will be extremely unsettled by the proposals. Supporting them in meeting the English language requirements at an appropriate time – if they don’t already – can be a good first step to increase morale and preparedness for a settlement application.
What the changes mean for long-term business planning
Overall, these changes will make it more complex for employees and employers to plan for settlement, making the path less predictable than it is now. It may force businesses – alongside other government proposals – to focus more on homegrown talent and upskilling to plug resourcing gaps.
However, in an industry like construction with many foreign workers, domestic supply may find it difficult to meet the UK’s demand.
Employers will have to review their long-term foreign hiring strategies and needs, potentially focusing on areas where skills are scarce and the increased sponsorship cost and compliance are more justifiable for the business. For those roles, additional effort may be required to reassure candidates that the UK remains an attractive destination to work.
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