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Sponsor Licence Duties & Compliance Guide

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Sponsor licences permit organisations to access the global talent market and recruit skilled non-UK resident workers – but they come with onerous compliance duties for the employer/sponsor. Fundamentally, the purpose of these duties is to place an onus on employers to play their part in preventing illegal working in the UK.

Meeting your duties as a sponsor licence holder will require knowledge of the rules and resources, effort and commitment to ensure your organisation is compliant.

Depending on how many sponsored workers you employ, in practice, it’s likely that your licence won’t require daily attention, but similarly, your licence cannot be left to run itself. You will need to understand what it means to manage the licence correctly, and when action is needed by you to avoid allegations of non-compliance.

The Home Office has powers to investigate employers suspected breaches of sponsor duties. They can undertake checks to verify that sponsors have adequate HR systems in place to ensure compliance, either before granting or renewing a sponsorship licence, or at any point during the four-year licence validity period. Site inspections can also be held at short notice and all sponsor licence holders are expected to be compliant with their duties at all times.

Where the Home Office alleges a failure to comply with sponsor licence duties, this can result in a downgrade in the licence rating, or suspension or revocation of the licence, putting the jobs and immigration status of existing migrant workers at risk.

If your licence is downgraded you will be required to pay UKVI for an action plan to be put in place, that specifies the issues that you must remedy in order to be upgraded back to A-status. If your licence is revoked you may be barred from applying for a new licence for a six-month cooling-off period. This all means it is much better to take a proactive approach to meeting your sponsor duties, and avoid having to deal with Home Office enforcement action.

So what do you need to do to ensure compliance with your sponsor duties?

 

When do sponsor licence duties start?

Your obligation to comply with the requirements as a licenced sponsor begin from the date your licence is issued until you relinquish it, it is made inactive, or it has been terminated. In practice, you will need to have taken certain measures in preparation for the sponsor licence application, since the eligibility requirements demand organsiations to evidence certain aspects of immigration compliance.

Your responsibility to each sponsored employee starts as soon as you assign the Certificate of Sponsorship, and it ends when one of the following occurs and you have reported it to UKVI:

  • a worker’s entry clearance or licence expires vor is rendered invalid when they leave the UK, or,
  • upon denial of the worker’s request for entry clearance or authorisation and following the conclusion of any administrative review or appeal procedures; or
  • the worker is granted permission to enter or permission to work for a different sponsor; or
  • the worker is compensated or given permission to carry on working on a route without your continued sponsorship; or
  • you notify the Home Office that you are no longer sponsoring the foreign worker.

 

What are the sponsor licence duties?

To avail of the advantages of employment sponsorship and accessing the global talent market, sponsors are obligated to comply with the following:

  • Ensure that the foreign workers you intend to sponsor have the requisite skills, experience or professional qualifications to do the job being recruited for and that you retain records and copies of documentation proving this.
  • Allocate Certificates of Sponsorship to foreign workers only for jobs that qualify for sponsorship.
  • Monitor your sponsored workers and notify the Home Office if they breach any of their visa or sponsorship conditions.

 

In practical terms, the duties can be expanded as follows:

  • Reporting duties: Sponsor licence holders are required to submit specific information or events to the Home Office through the SMS within specific time frames.
  • Record-keeping duties: Sponsors are responsible for maintaining records for each worker they support.
  • Complying with Immigration Rules: Respecting all requirements of the Worker and Temporary Worker Sponsor Guidance and UK immigration laws.
  • Complying with UK laws: Sponsor licence holders have a responsibility to abide by UK law generally (other than immigration law).
  • Acting in public good: All sponsors have a duty to conduct in a way that is compatible with core values and does not harm the greater benefit of society by refraining from behaviour or actions that are not beneficial to society.

 

If the Home Office alleges you have breached any of these duties, you risk your licence being downgraded, suspended or revoked.

 

How to comply with your sponsor duties

How you meet these duties will depend on the size of your organisation and how you use your sponsor licence; the more sponsored workers you employ, the more you will need to do to stay compliant.

 

Record-keeping

A large part of sponsor licence duties involves maintaining accurate records for each sponsored worker.
Appendix D of the Immigration Rules specifies the documents to be retained and how long they must be kept for.

You must also keep the documents used as part of your sponsor licence application.

For all visa types, a licence holder must keep a photocopy or electronic copy of:

  • The relevant pages of the sponsored worker’s passport, including those pages which contain personal identity details, leave stamps, immigration status and the period of leave to remain
  • The worker’s biometric residence permit
  • The worker’s National Insurance number
  • The worker’s current and historic contact details
  • The worker’s disclosure barring service check (if relevant)
  • A record of the worker’s absences
  • The worker’s contract of employment
  • Any other document required for the worker’s visa type

 

You should also maintain an up to date list of your sponsored workers’ contact details as well as details of pay rates (for example, payslips, bank transfers, contracts of employment and evidence of allowances) and sufficient documentary evidence to establish that the position and applicant are of the necessary skill level.

You should keep all the required records until an officer has examined them, or, if an officer has already examined them, for at least one year (if an employee works for less than a year, the duration of the employment).

Some documents may need to be held for longer periods to satisfy other laws and avoid a civil penalty for illegal employment.

 

Sponsored worker monitoring & reporting 

Beyond keeping records, there is a positive duty on sponsor licence holders to report to the Home Office using the SMS Portal within 10 working days if any of the following events have occurred:

  • A sponsored employee does not turn up to work on their first day.
  • A sponsored employee’s contract is terminated early.
  • A sponsored employee is absent from work for 10 of more days, without permission. Sponsors must ensure all sponsored employee absences are authorised, including sickness, annual leave, study leave and overseas travel.
  • There are significant changes in a sponsored worker’s contract of employment eg where the employee has been TUPE’d to a different sponsor.

Organisations are also expected to monitor the immigration status of their employees and report any changes, and to notify the Home Office of any suspicions and evidence that an individual is breaking the conditions of their stay in the UK.

Following a change in sponsor guidance in November 2022, sponsors no longer have to notify the Home Office if a sponsored worker starts work before the intended date shown on their Certificate of Sponsorship, provided the new start date is after their visa was approved.

 

Reporting organisational changes

With more than 32,000 sponsor licence holders in the UK, the Home Office places duties on these organisations to inform of certain organisational and employee changes to ensure their records are kept up to date, and that immigration enforcement is upheld.

Where there has been any change to the size of the organisation, or if any change impacting its charitable status, this must be reported within 10 days.

The following changes must be reported within 20 working days:

  • Change of organisation name
  • Takeover or sale of all or part of the organisation
  • The company has ceased to trade

 

Other changes that must be reported include:

Change of company address

If your company has moved address, the Home Office needs to know. Unannounced site visits remain common, requiring current addresses for immigration enforcement officials to attend and carry out inspections.

 

Change of Authorising officer

UKVI see the Authorising Officer as their key point of contact with your company, even if they aren’t involved in the day-to-day immigration work. It’s essential that you have an Authorising Officer in place at all times. If the current incumbent leaves the company, relocates overseas, or goes on sabbatical or maternity leave, you need to appoint someone else to fill the role, even where on a temporary basis to ensure continuity of cover.

 

Opening or closing a UK branch

Details of UK branches are not published on the SMS. This can make it difficult for employers to keep track of which addresses are on the licence. Maintaining clear, internal records and making sure these are amended every time a branch is opened or closed is the most effective way to ensure the licence is kept up to date.

 

Establishing or closing an overseas branch, subsidiary company or linked company

As with UK branches, overseas branches and subsidiaries are also not viewable on the SMS, making it challenging to know exactly which overseas companies are covered by your licence. Best practice is to update UKVI each time a linked entity overseas is established or closed. In any event, you must have informed the Home Office before you can look to transfer an employee from that overseas company to the UK. For groups that are prolific in opening new overseas branches or companies, programming in the submission of an update to UKVI every quarter, or yearly as appropriate, can help to ensure compliance.

 

Other significant changes to the company

Takeovers, acquisitions, mergers and TUPE transfers are all examples of significant organisational changes which are to be reported to UKVI, usually within 28 days of the change happening. Such changes will generally have complex implications for your sponsor licence, for example you may need to submit a new licence application within the 28-day timeframe. We would strongly recommend taking expert advice on what is needed as early as possible to avoid issues with your licence.

 

Complying with Immigration Rules & UK law

As a sponsor, it is essential to remember that one of your responsibilities will be to refrain from conduct that is detrimental to the public interest. Only people who are qualified, registered, or experienced for the role in question should be employed by sponsors. If the vacancy is not genuine, you cannot allocate a CoS or sponsor the worker.

To prevent illegal working you should retain records proving that the employees are qualified for the position and keep track of each employee’s immigration status. Don’t forget to follow UK employment legislation and confirm that the national minimum wage was paid.

 

CoS applications & renewals of certificates

When a certificate of sponsorship has been allocated to an individual, an organisation must assign it to the worker within three months.

Annual allocations of unrestricted certificates of sponsorship expire at the end of each financial year. Organisations must request to be allocated a new certificate every year and can do so from 5 January.

Organisations must only assign certificates for jobs that are suitable for sponsorship and must ensure that their employees have the necessary qualifications.

 

Appointing key personnel

A further requirement for sponsors is to appoint certain key personnel, who will have responsibility for administering your sponsor licence and ensuring the organisation is complying with its duties.

These roles can be assigned to a single person or multiple people, and in some cases external advisers can be appointed. In practice, for smaller companies with a small number of sponsorerd workers, it is usually the HR manager who will assume all of the key personnel roles. Larger employers with many sponsored workers will generally assign different roles to different members of the HR team.

 

Authorising officer

When applying for a sponsor licence you must appoint an Authorising Officer. You must have an appointed Authorising Officer in place at all times while your licence is valid.

The authorising officer should be the most senior employee with authority to hire foreign workers. They are ultimately responsible for the sponsorship licence.

The AO will be the first and primary point of contact for your organisation with UKVI. They will receive e-mails concerning changes to sponsors’ duties, the need to renew Certificates of Sponsorship or the licence itself. They are also required to authorise most of the changes or updates to your licence e.g notifying UKVI of a new branch. They do this by signing the submission sheet that will be generated whenever you submit a notification of change via the Sponsorship Management System (SMS).

The Authorising Officer will not have automatic access to the SMS to carry out any of the practical functions relating to sponsoring migrant workers, unless they are appointed as a Level 1 User.

 

Level 1 and 2 users

Level 1 and 2 users perform the day-to-day activities required of the sponsor licence holder, through the online Sponsorship Management System.

Your Level 1 User(s) will usually be the person or people who are doing your day-to-day immigration work. They have full access to the SMS, from which all functions of your licence are operated:

  • Undertaking routine sponsorship activities, including assigning Certificates of Sponsorship (CoS), reporting migrant activity and changes of circumstance, request CoS, apply for and assign restricted CoS
  • Viewing information about your licence
  • Notify UKVI of changes to your organisation
  • Applying to renew your licence and track the progress of your application

 

You must always have at least one Level 1 User in place, who can access the SMS to carry out these tasks. Initially, when making the licence application, there need only be one Level 1 user. This person must be an employee. However, additional users can be added at any time and can include employees as well as certain external representatives. UKVI recommendsthat you keep numbers to the minimum necessary for effective business operation while ensuring accountability.

Level 2 users can also be added and have restricted system access. They can only assign CoS  and report migrant activity. They cannot access your general licence information or report any changes within the organisation.

You can appoint as many Level 2 Users as you need once your licence is in place.

 

Key contact

Your key contact is UKVI’s other main point of contact for the licence. They are responsible for liaising with the Home Office. The Home Office will contact them in the event that they have queries about your sponsor licence application, the documents submitted or the payment.

When applying for a licence you must nominate a key contact and you should have one at all times whilst you hold the licence.

Your key contact can be an employee or officer of the company, or a legal representative, provided they are based in the UK.

If you require your key contact to have access to the SMS, they will need to be set up as either a Level 1 or Level 2 user. They will not otherwise have access to the SMS.

 

Key personnel guidance

Many sponsors fall foul of their compliance duties due to issues relating to the key personnel. We have highlighted some common risk factors below, but in general, it is advisable for sponsors to undertake regular checks on key personnel appointments and licence management activity.

Key personnel suitability requirements

Employers should also be aware that individuals appointed as key personnel must meet certain suitability criteria and will be subject to checks. Issues with the suitability of your proposed key personnel can expose the organisation to enforcement action.

When making a sponsorship application, the Home Office will verify that all key personnel do not pose a threat to immigration control. In addition:

  • They must be based in the UK For the duration of the period that they fill one of the licence roles, key personnel must be permanently based in the UK. In other words, even if your UK company is a subsidiary or branch of an overseas company and your HR function is based outside the UK, you must still appoint UK-based personnel to fill the sponsor licence roles.
  • They must not have any criminal convictions or immigration breaches UKVI will check Authorising Officers, Key Contacts and Level 1 Users for unspent criminal convictions at the time of your licence application, and can check at any point after that during the duration of your licence. They must also not be subject to any bankruptcy or debt relief restrictions. Any prior failures to carry our sponsorship duties or convictions for immigration offences, fraud, money laundering, or failure to pay VAT, may put a licence at risk. If any of the key personnel have been involved with a sponsor organisation whose licence has been revoked within the last 12 months, the licence application can be refused.
  • UK-settled workers You must have a minimum of one Level 1 User who is a settled worker.
  • Ordinarily a paid member of staff or an office holder Office holders include the Company Secretary, Directors and owners of the company. Your key personnel cannot be:
    • A representative not based in the UK
    • A contractor or consultant contracted for a specific project
    • Subject to a Bankruptcy Restriction Order or Undertaking
    • Subject to a Debt Relief Restriction Order or Undertaking
    • Legally prohibited from being a Company Director.

 

Replacing key personnel who have left
If one of your key personnel leaves the organisation and you fail to appoint someone else to the role, or if the individual does not meet the eligibility criteria, UKVI can choose to downgrade your licence, charge you to upgrade it again, or even revoke your licence altogether.

 

Update contact details

You must provide contact details for all Key Personnel at the time of your licence application and if any changes occur subsequently.
The contact address given for each of your Key Personnel must be either:

  • Your main address
  • A branch or head office included in your licence
  • Your representative’s business address

 

If your organisation moves location you must update the contact details for your Key Personnel, as well as updating the licence address itself.

 

Secure e-mail and passwords

All email addresses you provide for Key Personnel must be secure, personal to and only accessible by the named individual. The log-in details sent to each of your Level 1 Users are also specific for each individual and must not be used by or accessible to others.

UKVI may suspend a licence where they identify a breach of either of these rules and we are increasingly hearing of cases where this has happened.

 

Always be prepared for compliance visits

Compliance is an ongoing concern. The Home Office has powers to conduct announced and unannounced site inspections of sponsor licence holders, both before making a determination on a licence application or during the licence validity period, whether at random or in the event of a plausible suspicion.

If the Home Office are attending your premises for an inspection, you must work with the officers and grant access to any locations under your control to any of their representatives. You also have to provide access to personnel documentation and HR records. The accuracy and completeness of the information you supply on your sponsor licence application may be checked by the Home Office. You must make sure that the documents and files listed in Appendix D of the sponsor guidance are readily available. In addition, the Home Office might confirm with HMRC that you are paying your employees fairly. To make sure you are complying with your duty to stop illegal working, the Home Office may also check on the immigration status of other foreign employees.

 

Breaching sponsor duties: Home Office enforcement

The Home Office can undertake checks to verify that an organisation has sufficient HR systems in place to ensure compliance, either before granting or renewing a sponsorship licence, or at any point during the four-year licence validity period. Site inspections can also be held at short notice and all sponsor licence holders are expected to be compliant with their duties at all times.

Where the Home Office alleges a failure to comply with sponsor licence duties, this can result in a downgrade in the organisation’s licence rating, or suspension or revocation of the licence, putting the jobs and immigration status of existing migrant workers at risk.

 

Licence downgraded

in the case of minor breaches, the Home Office may decide to downgrade the licence from an A-rating to B-rating. While your licence is downgraded, you will not be allowed to allocate any CoS to new sponsored workers. You will also be required to follow an action plan to resolve the breach and reinstate your A-rating status. You will also have to pay a fee for this plan.

 

Licence suspended

f you are facing allegations of more substantial breaches, the Home Office has powers to suspend your licence while further investigations are made. You will be notified of the suspension in twirting and will be required to respond to the letter, either accepting the allegations or challenging the grounds for suspension. The Home Office will then make a decision to end the suspension if they are satisfied that the breaches have been addresses, or to escalate the penalty to a revocation if the issues are not resolved.

 

Licence revocation

his is the most severe penalty for licence holders. If your sponsor licence is revoked, you lose your ability to sponsor migrant workers. You could also be barred from reappying for a new licence for six months ‘cooling off period’.

If your licence is revoked, you will also lose your permission to sponsor migrant workers. Any qorkers that you sponsor in the UK will see their visas curtailed to 60 days, or the period remaining on their visa if this is less than 60 days. Within this timeframe, they must either secure permission to remain in the UK under an alternative route (for exmaple, by finding a new role with a new sponsor) or leave the UK.

 

Need assistance?

Failure to comply with your licence duties can result in Home Office enforcement action, including suspension or revocation of the licence, and impact your sponsored workers’ visas.

Our advice for maintaining compliance and keeping the Home Office happy? Avoid falling into the trap of ‘out of sight out of mind’. A neglected licence may cause issues at renewal stage or if the Home Office attends your premises unannounced. You can avoid issues, scrutiny and penalties by keeping on top of your sponsor duties.

As UK business immigration specialists, we provide ongoing compliance support and guidance to sponsor licence holders. Contact us if you have any queries about your sponsor licence duties.

 

Sponsor licence duties FAQs

What are the responsibilities of a sponsor for an immigrant?

By sponsoring a worker, you will need to comply with specific reporting, monitoring and record keeping duties in relation to your licence and to sponsored workers' activities.

What is an employer sponsor?

A sponsor is an organisation licensed by the Home Office to employ non-UK resident workers.

What do you have to do to be a sponsor?

An organisation has to apply to the Home Office for a skilled worker sponsor licence to be able to hire non-UK resident workers.

How do I sponsor someone to work in the UK?

You will need to make an application for the relevant type of sponsorship licence. This requires ensuring the organisation is eligible; compiling and submitting the application and supporting documents; and paying the application fee.

Last updated: 13 December 2022

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