In the past two years, an extra 20,000 businesses have registered to employ workers from overseas. This is on top of over 29,000 businesses already registered up to 2020 and represents a huge rise which is down to two main factors. Firstly, Brexit meant that EU citizens lost the right to work freely in Britain and those coming here to work now who do not have settled or pre-settled status must now have an applicable work visa. Those employing them must also be registered with the Home Office and hold a valid sponsor licence. Secondly, acute labour shortages in the British workforce have forced many businesses to look overseas to fill vacancies. This, coupled with a post-Brexit immigration system that has made it easier for legal migrants to enter the UK workforce, means that many more businesses now hold a licence to sponsor a worker under the Skilled Worker and Senior or Specialist Worker visa routes, which are the two main sponsored work routes in the UK.
As labour pressures continue, demand for sponsor licences is set to rise throughout 2023 and many businesses who have never considered employing from overseas are now exploring this as a feasible option. In response the Home Office has expanded capacity to process sponsor licence applications and remains committed to reducing the time it takes businesses to sponsor a worker.
For those applying, and for the new cohort of licence holders, the procedure can be confusing and daunting. To hold a sponsor licence, a business must meet strict criteria and must be able to demonstrate it has the required systems and processes in place. Many businesses that could use skilled workers from overseas do not because they are put off by the application and maintenance process.
It helps to understand how the system works. A UK sponsor licence is a permission granted by the UK government to a business or organisation allowing them to sponsor non-European Economic Area (EEA) and non-Swiss citizens to come to the UK to work.
The process of obtaining a sponsor licence involves an application and a compliance assessment by the UK Visas and Immigration (UKVI) agency. Once a sponsor licence is granted, the business or organisation will be assigned a unique sponsor licence number and will be placed on the Register of Sponsors. They are then able to sponsor foreign nationals and apply for certificates of sponsorship (CoS) on their behalf. The CoS is then used by the foreign national to apply for a visa to come to the UK.
UKVI conducts regular compliance visits to licence holders to ensure they are fulfilling their duties such as keeping accurate records of sponsored employees. This information must be readily available for inspection by UK Visas and Immigration (UKVI) officials. It is also the responsibility of the sponsor licence holder to monitor the compliance of their sponsored employees, including ensuring they are working in accordance with the terms of their visa and that their contact details are up-to-date.
Sponsor licence holders must notify UKVI of certain events and changes, such as if a sponsored employee is no longer employed or if their contact details change.
It helps to stay abreast of immigration laws and regulations. The UK immigration system is in constant motion with new rules added at a whim, and regulations tightened or relaxed at intervals. If you are uncertain about your responsibilities as a sponsor or have any concerns about your sponsorship arrangements, it is advisable to seek professional advice from a qualified immigration lawyer as issues can usually be dealt with easily and quickly.
There has been a trend reported in some recent compliance visits whereby officers have been asking about workplace pension schemes and this is something to bear in mind for new licence holders. You may be asked to provide records to prove employees have opting out of the company pension scheme. Employment contracts may be scrutinised to see that they match current pension rules Compliance officers might ask to see a "clause" regarding the workplace pension scheme and if there is no clause, this might lead to a negative report. This is unlikely to be a problem for larger companies with generally robust HR procedures but may be an issue for smaller employers. Companies that do not have a workplace pension scheme, such as sole traders newly registered for a licence, might struggle with this line of questioning.
The key is to be aware of your sponsorship duties and your duties as an employer.
Throughout this year improvements are due to made in the system and from 2024 a new, digital 'Become a sponsor' service is due to be introduced. Meanwhile, political pressure following record numbers of visas issued last year will mean that sponsor compliance visits remain a priority so licence holders can expect a high level of scrutiny. For this reason, it is worth taking time to check certificate all paperwork and details are up to date and in order.
Originally published in People Management, 30 Jan 2023
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
