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Preparing to Apply for Sponsor Licence

To employ skilled non-EEA workers, UK employers first have to apply for sponsor licence. But a refusal rate of 15% suggests employers are struggling to get the application process right. 

UK immigration rules are demanding on employers who want to bring talent to the UK.

And through increasingly protectionist policies, designed to encourage employers to favour resident labour, the rules have become more onerous – and costly – for employers.

However, the ability for UK organisations to access skilled talent from overseas has never been more essential.

With figures showing EU workers leaving the UK amidst Brexit uncertainty, and domestic skills shortages in sectors as broad as tech, health and social care, education and engineering, employers in Britain are looking to the global talent market to meet their recruitment needs. This means making the commitment (financial and legal) of applying for a sponsor licence.

Tier 2 visa

The Tier 2 visa is the primary entry route to the UK for skilled foreign workers from outside Europe.

To be able to hire new skilled workers from outside the EU under a Tier 2 visa, or extend work permits for current employees, employers must apply for a sponsor licence from UK Visas & Immigration (UKVI).

The application process is far from straight foward, requiring applicants to demonstrate that:

  • You are a genuine organisation operating lawfully in the UK.
  • Your key personnel named on the sponsor application are honest, dependable and reliable.
  • You have effective HR and recruitment systems and practices in place.
  • You are offering genuine employment that meets the Tier 2 skill level and appropriate rates of pay.

There are also rising costs associated with this visa which employers need to have a full grasp of.

If you are considering applying for a sponsor licence, you want to improve the prospects of the Home Office approving your application. Answering the following questions will help you to build a compelling case that is compliant with the requirements on you as a sponsor licence holder.

Questions to ask before you apply for sponsor licence 

  1. How will you use your sponsor licence?

Since successful licences are valid for four years, you need to be clear at the outset what your recruitment needs will be in order that your licence provides sufficient cover for its duration.

When you apply for a sponsor licence you will need to specify the types of workers you are looking to recruit:

  • Tier 2 workers: Skilled workers with long-term job offers.
  • Tier 5 workers: Skilled temporary workers.

You then need to consider how you will use the sponsor licence.

There are two options available – the unrestricted Certificate of Sponsorship (CoS) and the restricted CoS.

Unrestricted CoS are used for new employees with a salary of more than £155,300; switching within the UK to the Tier 2 (General) visa; and extensions.

When you apply for your licence you will be asked to estimate how many Tier 2 certificates you will require. You will then be granted fixed allocations of unrestricted CoS on a yearly basis as part of your sponsor licence.

You must issue the unrestricted CoS to the overseas worker within three months of allocation and within six months of first advertising the vacancy.

Individuals must then apply for Tier 2 clearance within three months of receiving the CoS.

Restricted CoS are intended for new employees applying from outside the UK to enter under a Tier 2 (General) visa and who will be earning under £155,300 per annum, and individual dependants of Tier 4 students applying from the UK wishing to switch to a Tier 2 (General) visa.

There is an annual restriction in place on the number of migrant workers admitted to the UK from outside the EU under a Tier 2 (General) visa on restricted CoS.

UKVI review all applications for restricted CoS on a monthly basis. Those requests which meet the points criteria (minimum 32 points) are approved. If the restrictive allocation limit is oversubscribed, applications are prioritised according to a points table.

The available restricted CoS are allocated based on the highest points scored. Points are awarded based on whether the job is in a shortage occupation, a PhD-level occupation, and the salary on offer.

There are no guarantees if and when restricted CoS applications will be approved.

If a CoS is granted, the employer assigns the CoS to the individual, who can then use the reference number to apply to the Home Office for entry permission.

Any restricted CoS unallocated after three months will be automatically returned to UKVI for reallocation.

2. Who should you appoint as key personnel?

As a sponsor licence holder, you are required to nominate individuals within your organisation to carry out particular administrative functions – so-called ‘key personnel’:

• Authorising Officer
• Key Contact
• Level 1 user

It is important that you understand when you apply for a sponsor licence the purpose of each of these roles and who you can – and critically cannot – appoint to them.

You must make also sure that you have an Authorising Officer and at least one Level 1 user in place at all times. If a member of staff leaves and you fail to appoint someone else to the role, UKVI can choose to downgrade your licence (and charge you for the opportunity to upgrade it again) or even revoke your licence altogether.

Once you have been granted a licence you can also choose to nominate individuals as Level 2 users.

3. Compile your application & supporting documentation 

To apply for a sponsor licence you must write and submit an online application. Preparation is essential.

In support of your online application, you must collate and submit supporting documentation to meet the necessary evidentiary requirements.

The supporting documents must be supplied within five days of the initial application. Failure to submit all required documents will result in your application being delayed or rejected, and further costs being incurred.

So it’s important to have prepared all of the necessary evidence and documentation by the time you make your application online.

4. Prepare for a UKVI inspection

You may be subject to a compliance visit from UK Visas and Immigration following receipt of your application. The purpose of a Home Office inspection is to verify whether you have adequate HR systems in place to meet sponsor licence requirement and to assess whether or not to grant the licence.

An audit of your HR operations will be key in preparing for a site visit, to identify process weakness or omissions that could impact your licence application.

5. Internal capability 

Are your staff aware of their duties and responsibilities under the sponsor licence? A common area of compliance risk is lack knowledge of personnel involved in the sponsor licence, across the recruitment, onboarding and staff management stages.

Training is likely to be required to ensure relevant knowledge and internal capability internally across HR, line managers and site managers.

6. Ongoing sponsor licence compliance duties

Sponsor licence holders are required to meet a number of duties, which you must take account of within your processes, policies and procedures.

Some duties appear more widely understood than others.

The duty to notify a change in circumstances is for example often overlooked in reality, particularly where wider organisational concerns demand attention and focus such as a merger or acquisition or other organisational change. Failure to comply with your ongoing compliance duties can result in a downgrade in user rating, a licence suspension or revocation – putting the jobs of existing migrants at risk and impacting your organisation’s operations.

Ongoing compliance management will also pay dividends when it comes to renewing the licence – which is arguably even more of a complex process.

7. Use of Resident Labour Market Test

Once you are granted a sponsor licence, you must evidence that the domestic labour market has not been able to fulfil the position before you recruit from overseas, by using the Resident Labour Market Test (RLMT).

Understanding your duties under the RLMT is important, and specifically what this means for how you advertise for jobs and how you keep records to evidence compliance with the RLMT.

There are exceptions. In recognition of shortages in a number of areas, roles which feature on the Shortage Occupation List (SOL) are exempt from the RLMT. In cases of SOL positions, employers may issue a Tier 2 CoS to a non-European worker without the need to demonstrate that a resident labour market test (RLMT) has been carried out.

8. Right to Work 

In addition to the new administrative burdens of the sponsor licence, you will continue to be required to meet your illegal working duties. The requirements state that all employees are required to provide documentation that proves their right to work before being employed by a UK company and copies of this information must also be retained by the employer.

Other considerations when you apply for sponsor licence

Applying for a sponsor licence is only the first hurdle for employers in accessing the global talent market. If you are successful in your application, there is no room for complacency as your HR processes must kick-in and support ongoing compliance with your duties as sponsor licence holder.

Penalties for failing to comply with sponsor licence duties are designed to impact operations to deter employers from falling short in their obligations. Yet UK immigration rules are subject to constant change and revision, making it critical that sponsor licence holders stay up-to-date and compliant with their duties.

All too often we see at the sponsor licence renewal stage after four years that processes have slackened, creating business-critical risk of licence refusal where UKVI see serious errors or breaches in compliance.

DavidsonMorris can provide clients with a complete employer sponsorship licence application package, with our team of UK immigration specialists well versed in all the document and evidentiary requirements that can be vital to a prompt and stress-free process when you apply for a sponsor licence.

It may also be that a sponsor licence is not the best option for your business and its needs. We can advise on the most suitable entry routes for your specific requirements.

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