Immigration compliance for UK sponsor licence holders

Maintaining a sponsor licence is essential for organisations who wish to sponsor migrant workers in the UK. The Home Office issues licences to UK businesses to employ workers in the UK who may not otherwise have a right to work in the UK (eg by having another visa that confers work rights). Once licenced, businesses issue “Certificates of Sponsorship” (CoS) to the workers they wish to sponsor, which enables the workers to make the necessary immigration applications to obtain permission to work in the UK.

In exchange for the ability to bring workers to the UK, the Home Office expects sponsors to adhere to strict compliance obligations, keep detailed records, and monitor and report changes of circumstances where necessary. Sponsors are expected to have an excellent working knowledge of the Home Office rules and guidance, which can run to thousands of pages. The courts consider these requirements to be “conditions of participation” for the licencing regime, such that sponsors “cannot complain if they are required to abide by them”.

Where sponsors haven’t adhered to their obligations, the Home Office has broad powers to downgrade, suspend, or even revoke a licence. This can, in turn, have a significant impact on their sponsored workers’ employment.

During the Covid-19 pandemic there was a downturn in Home Office compliance visits, but we are now seeing an increase in compliance audits, resourced by an increase in the number of Home Office caseworkers monitoring sponsor licence compliance. The Home Office recently published their quarterly statistics for 2024, which revealed that in the first quarter of this year, 309 Skilled Worker sponsors have been issued with suspension letters, and 210 sponsors have had their licences revoked. This represents a marked increase of 109 per cent in suspensions and 51 per cent in revocations when compared to the same period last year. We expect this trend to continue under the new Labour Government, who stated in their manifesto that employers who “flout the rules will be barred from hiring workers from abroad”.

Recent case law on sponsor revocations

UK care providers with sponsor licences have been particularly affected by this additional scrutiny. In a significant case late last year, the Home Office conducted a compliance visit at a care home and identified five workers who were not performing the duties listed on their CoS, and one instance where a worker was being paid a salary less than what her employer had guaranteed on her CoS.[1] Given the number of significant compliance breaches, the Home Office revoked the care home’s licence, a decision that was upheld by the High Court.

However, in a more recent case, the Home Office suspended and moved to revoke a sponsor licence where one sponsored worker was found to be undertaking only six of the eight duties listed on her CoS.[2] In this particular instance, the High Court felt that revocation was disproportionate, and the decision was quashed.

What the recent case law illustrates for all sponsors is the Home Office’s attitude to sponsor compliance and their willingness to revoke sponsor licences, even where there is a single breach relating to just one worker.  

Preparing for Home Office audits

Below, we list our five top tips for Skilled Worker sponsors seeking to avoid common compliance pitfalls:

1. Certificates of Sponsorship must be accurate

As shown by the recent cases above, job descriptions must be accurate and consistent with what the individual sponsored migrant will be doing in their role. Home Office compliance officers may ask for examples of the work done to ensure that this is in keeping with the role on the job description. Sponsors should not be tempted to “copy and past” previously drafted CoS and should tailor each certificate to the role that the Skilled Worker will undertake in the UK.

Sponsors should also review any changes to the migrant’s role periodically so that these can be captured and reported to the Home Office. Gaps and discrepancies around job descriptions can cause serious issues for sponsors. If the role undertaken by the worker does not match the job description, if any false information is provided as part of the CoS application, or if the Home Office has reasonable grounds to believe the role for which the CoS has been assigned is not genuine, the Home Office have grounds to revoke a sponsor licence.

2. Be prepared for an audit at any time

Home Office compliance officers may visit sponsors on an announced or unannounced basis at any time during the lifetime of a licence. They have the power to inspect any of the work locations listed on a sponsor licence (including any third-party offices if migrant workers work from these premises) and have increasingly started to conduct virtual audits.

We expect that all sponsors will be audited over the lifetime of their sponsor licence. Common trigger points for an audit are before or after a licence application is made. Until earlier this year, sponsor licences were renewable every four years, but the Home Office has now removed the expiry date on sponsor licences so that sponsors no longer need to renew their licences. Whilst this removes a layer of bureaucracy for sponsors, this was previously a point at which the Home Office would review the licence (and sponsors would often prepare every four years by undertaking audits internally).

Regular mock compliance audits or annual health checks with an immigration adviser can provide invaluable advice on compliance and ensure that, in the event of a Home Office inspection, sponsors are fully compliant.

3. Ensure internal systems are robust

It is critical to have good HR systems in place to track and monitor both sponsored worker activity and corporate structural changes. Sponsors are required to report significant changes of circumstances to the Home Office within tight deadlines (usually either 10 or 20 working days, depending on the type of change). Some of these are obvious changes (for example, a change in the migrant’s job title following a promotion will need to be reported to the Home Office) but other changes are less intuitive (for example, a change of ownership or parent company is reportable, and indeed may trigger the need for a new sponsor licence).

Sponsors should ensure they have good lines of reporting in place to ensure that changes can be captured by the Authorising Officer and other Key Personnel, as needed. It is imperative that all Key Personnel on the licence understand their core sponsorship duties, reporting triggers, and understand how to navigate the Sponsor Management System. It is sensible to ensure good coverage so that if Key Personnel leave the business or take annual leave, sick leave or a sabbatical, reporting lines and ability to comply with sponsor duties are not impacted.

Sponsors should also be prepared to explain how their systems and records work to a Home Office compliance officer. In particular, sponsors should expect the Home Office to focus on any unreported changes or late reporting at an audit.

4. Remote working

Before the pandemic, it was unusual for sponsored migrants to work from home or have the option to hybrid work (not least because it prompted the Home Office to ask why an individual needed to be sponsored in the UK if they could do their work remotely). The Home Office clarified their approach last year to confirm that sponsors must report where a worker will be working remotely from home on a full-time or permanent basis, or if they are or have moved to a hybrid working pattern.

In such cases, sponsors must be able to explain to the Home Office how they can continue to fulfil all sponsor obligations, particularly around reporting and record-keeping. For example, how they can carry out a Day 1 Right to Work check, monitor the hours that migrants work, the work undertaken, or review attendance or sick leave. It is essential that clear policies and systems are in place which show that compliance obligations are being met in such circumstances.

5. Prioritise accurate record keeping

Sponsors are required to keep various records on file for their workers in line with Home Office guidance. This includes details that would typically form a part of any HR file (such as, for example, copies of employment contracts and payroll data) but can also include details that sponsors often overlook but are equally important for sponsor compliance (eg a history of a migrant’s contact details in the UK). Of particular importance are records to evidence that the sponsor is carrying out right to work checks on all employees, in line with Home Office guidance. Failure to produce these records will raise red flags with Home Office at audit and can have severe consequences.

Key Personnel should know where employee files, payroll data, and key policy documents live and ensure they have access to this in the event of an audit.   

If you have any questions about the above, please contact a member of our Immigration team. We regularly advise employers on immigration and compliance matters, conduct mock audits and health checks on licence holders, and provide compliance training for key staff.

[1] Prestwick Care Ltd & Ors v Secretary of State for the Home Department [2023] EWHC 3193 (Admin)

[2] (Supporting Care Ltd, R (On the Application Of v Secretary of State for the Home Department [2024] EWHC 68 (Admin)

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, August 2024