The Mayor said that construction, hotels and restaurants would suffer “scary” staff shortages, while already dire vacancy levels in nursing and social care would worsen.
Mr Khan spoke out on a three-day visit to Berlin and Paris to spread the message that “London remains open” to trade and investment after Brexit.
The Government is expected to decide by the end of the year whether to adopt the recommendations of the Migration Advisory Committee (MAC) on changing the UK’s immigration policy after the Brexit transition period ends in 2021.
In September, the MAC proposed scrapping the freedom of movement that currently gives preferential treatment to workers from the European Economic Area (EEA), and replacing it with one rule for all foreign workers, both from the EU and worldwide.
There would be no limit on the number of foreigners given general work visas, also known as Tier 2 visas — but a £30,000 minimum salary required for those from outside the EEA would be extended to all migrants.
The MAC wants to retain the £30,000 rule to prevent cheap foreign labour driving down wages in the UK. Mr Khan believes this would deprive the capital, where about half of all jobs are for under £30,000, of essential workers.
He says it ignores the reality of London’s dependence on EU citizens.
He told the Standard: “If they are rigid with the MAC report and give preferential treatment to those who earn above £30,000, not just our economy but our public services will suffer hugely. This idea of it being even more difficult for us to recruit construction workers is scary.” City Hall says one in eight construction jobs (46,000) and one in four jobs in the hotel and food sector (61,000) are held by EEA workers earning less than £30,000 a year.