Why the Fair Work Agency needs a migrant worker focus

Migrants play a crucial role in the UK labour market. In 2024 the number of foreign-born workers hit an all-time high of seven million, bringing their workforce share to more than one fifth (21%) and making them indispensable in sectors such as services and healthcare. 

Yet across several indicators, this cohort of workers experiences more precarious employment conditions than their British counterparts and higher risks of exploitation. Foreign-born workers are overrepresented on temporary and zero-hours contracts, overrepresented in low-paid roles, and underrepresented in trade unions. They also face additional barriers to accessing employment justice, particularly when their immigration status is tied to their employer.

In this blog post we examine migrants’ position in the labour market and how the Fair Work Agency (FWA), the single body that will take on the enforcement of employment rights, can function to support them.  

More than 1 in 5 workers in the UK were born abroad

According to the latest quarterly Labour Force Survey (LFS) data from Q3 2024, the share of migrant (foreign-born) workers in the UK workforce has more than doubled over the last 20 years, from just under 10% in 2004 to 21% in 2024 (see Figure 1). This means that more than 1 in 5 workers in the UK are born abroad. In absolute terms, this amounts to a growth from 2.7 million foreign-born employees in Q3 2004, to 7.0 million in Q3 2024.

Figure 1. Migrant share of UK workforce, Q3 of 2004-2024

Multiple sectors of the economy have become particularly reliant on migrant labour. More than a quarter of workers in transportation and storage, accommodation and food, and information and communications technology (ICT) were born abroad. Together, these three industries alone contributed as much as 12.1% of total gross value added (GVA) to the economy in 2023. 

Figure 2. Share of economic output vs migrant share of workforce, by industry

Foreign workers are also overrepresented in many occupations that provide key services, the best example being healthcare. Looking at just those without UK citizenship, migrants made up 19% of the NHS workforce in June 2023 and 25% of the adult social care workforce in March 2024. Some occupations which suffer from particularly high staff shortages are even more reliant on migrant workers. For example, as many as 27% of NHS nurses and 32% of care workers were non-UK nationals. 

Migrants are overrepresented in precarious employment and underrepresented by unions

While migrants are critical to certain sectors and important for the UK economy as a whole, they are also in more precarious employment than their British-born counterparts and less unionised. 

Precarious work is generally characterised by a combination of contractual insecurity, low pay and limited access to employment rights. The most secure form of employment is employment on a permanent contract with guaranteed hours. Yet, the latest Labour Force Survey data show that as of September 2024, more than 1.5 million people were on temporary contracts (5.3% of the workforce), and more than 1.1 million people (3.4% of the workforce) were on zero hours contracts (ZHCs), with no work guaranteed by their employers. 

Migrants are overrepresented in both cohorts. According to the latest Annual Population Survey (APS) data, 7.1% of migrants were on a temporary contract in their main job, and 3.6% were on a ZHC, whereas for British-born workers the figures stood at 4.4% and 2.5% respectively. On average, migrant workers are more likely to experience these different forms of contractual insecurity (see Figure 3).

Figure 3. Relative contractual insecurity of migrant workers, Oct 2023 - Sep 2024

Another issue is that of pay. Lower pay is known to reduce people’s ability to switch jobs and has been found to correlate with greater incidence of certain labour breaches, especially where salaries are near the National Living Wage threshold. 

Foreign-born workers were overrepresented in six out of the nine occupations with the lowest median hourly wage. This is based on the Annual Survey of Hours and Earnings and unweighted APS survey data, where migrant workers constituted 16.4% of the overall sample (see dotted line in Figure 4), but a significantly higher proportion of respondents in most low-paid roles.

Figure 4. Migrant share of employees in non-professional, non-managerial roles, 2024

There is also an indirect link between wages and precariousness, namely in that lower-paid workers are less able to bring forward an Employment Tribunal claim when their rights are breached. This is because employment law and Tribunal processes are complex, while affordable legal advice is scarce, and legal aid is unavailable for most claims. 

Trade unions could support some of these lower-paid workers, but this is another area where migrant workers are underrepresented. Our analysis of the most recent Understanding Society survey data finds that only 40% of migrants were in a workplace that had a union presence, compared with 46% of UK-born workers. Unsurprisingly, the same data also points to discrepancies in union membership. Just 21% of migrants were union members, compared with 27% of UK-born workers (see Figure 5). 

Figure 5. Unionisation of UK-born and migrant workers, 2022-2024

Barriers to good work

The prospective Fair Work Agency needs to take this data seriously. It is important to understand that many migrant workers are not merely experiencing the general insecurity of low pay, temporary contracts, and lack of representation, but also additional barriers to accessing good work. This is why their voices must be heard on the advisory board informing the FWA, and a strategy is required to respond to these vulnerabilities.

English language ability is an obvious added difficulty to migrants’ ability to assert their rights and access better employment opportunities. According to 2021 Census data, for roughly half (49%) of foreign-born employees, English was not a first language, and 1 in 14 (7%) of employees did not know English well. Another barrier is the devaluation of qualifications, which prevents migrants from accessing roles commensurate with their skill sets. The Migration Observatory found that 26% of highly educated foreign-born workers were in low and medium-skilled jobs in 2022 (the figure for British-born workers was 20%). Some recent migrant groups, such as Romanians and Bulgarians, had overqualification rates as high as 44%. 

Employer-sponsored visas

Systemic barriers also actively limit many migrants’ access to good work and employment justice. 

Since the end of free movement on 1 January 2021, most foreign-born people who want to work in the UK must be sponsored by a Home Office licensed employer. Employer-sponsored migrants can only work full-time in a specified role for their visa sponsor, and if they lose their jobs they officially have just 60 days to find another sponsor, or risk becoming undocumented. In theory, they have a right to change employers, but in practice, this is made extremely difficult by the absence of a register of sponsors with a breakdown by industry, high visa renewal fees, and the fact that migrants can neither work full-time nor claim public funds while they are transitioning to a new sponsor.  

Numerous publications by the ICIBI, Migration Advisory Committee (MAC), GLAA, charities and academics, have highlighted the heightened risk of labour exploitation inherent in the current work-sponsorship system. Our previous reports have documented them in-depth, and proposed immigration reforms that could mitigate them. While the Immigration Rules are, admittedly, not within the remit of the FWA, labour market officials should nonetheless champion the need to reform the work-sponsorship system, and implement a strategy to reach out to, build trust with, and safeguard the welfare of sponsored visa workers.

Secure reporting

A key component of the trust in labour enforcement is secure reporting, or knowing that blowing the whistle to the authorities will not backfire. Currently, there is no separation between labour enforcement agencies, which are meant to protect workers, and immigration enforcement, which is punitive. 

Under the ‘Hostile Environment’, labour enforcement bodies have been found to share individuals’ immigration status with the Home Office, and in some cases conduct investigations jointly. Numerous interventions from civil society have shown that this discourages people from filing reports against exploitative employers, excluding them from protections and allowing rogue employers to act with impunity (an exception being the Employment Agency Standards Inspectorate).

The Fair Work Agency must protect migrant workers

To deliver on the promise to give all workers a “new deal” and create a labour enforcement system they can trust, the FWA must respond to the particular vulnerabilities of migrant workers. This starts by including migrant workers’ representatives in the Advisory Board that will inform the body’s strategy and co-designing the FWA with some of the people it most needs to protect. It should also institute secure reporting and champion reforms to the work migration system, which time and again has been found to trap sponsored visa workers in exploitative situations.