Holding a sponsor licence allows businesses to legally employ overseas workers under the UK's points-based immigration system. However, compliance is an ongoing obligation, and failure to meet the Home Office's requirements can result in suspension, revocation, or even bans from future sponsorship. I've seen some clients make mistakes, and this risks your licence.
To avoid these risks, sponsors must understand their duties and implement robust compliance processes. This guide outlines key responsibilities, including record-keeping, reporting obligations, right-to-work checks, and compliance with working hours for both sponsored and non-sponsored workers.
1. Understand Your Sponsorship Duties
The UK Home Office requires sponsor licence holders to:
- Maintain accurate and up-to-date records of all sponsored workers.
- Report relevant changes concerning employees and the business via the Sponsor Management System (SMS).
- Ensure compliance with UK immigration laws, including visa conditions, and UK employment laws.
- Prevent illegal working by conducting right-to-work checks.
Non-compliance can result in serious consequences, including civil penalties and loss of the sponsor licence.
Not paying the minimum wage will land you in hot water, the rules are not pay the hourly rate at the time you assigned the CoS, even if the minimum wage increases, the rules are that you pay the minimum wage or the minimum hourly rate ("hourly going rate"), whichever is higher.
Hence, if you assigned a CoS for a care worker when the minimum hourly rate was £10.10 per hour, you must pay them the current minimum wage of £11.44 per hour.
2. Maintain Accurate Record-Keeping
Sponsors must retain comprehensive records for each sponsored worker, including:
- Copies of passports, biometric residence permits (BRPs), and visas.
- Up-to-date contact details (home address, phone number, email).
- Employment contracts, salary details, and job descriptions.
- Right-to-work check records and recruitment process evidence (if applicable).
All records should be retained for the duration of sponsorship and for at least one year after sponsorship ends.
3. Fulfill Your Reporting Obligations
Employers must report certain changes via the SMS within specific timeframes, including:
- Employee-related changes: Resignations, prolonged absences (10+ consecutive days without permission), job role changes, or salary adjustments.
- Business-related changes: Address changes, mergers, acquisitions, insolvency, or significant operational changes.
- Workplace Location Changes: If a sponsored worker moves to a different branch or location, it must be reported.
Failure to report these changes can lead to compliance breaches. Make sure you understand the timeframes you have to make these updates. If an employee's employment details change you have 10 working days to report it, and if it's a business change you have 20 working days to report it.
Don't make the assumption that you can promote people and make a report, remember each job has its own SOC code and you need to make sure that it fits under the same SOC code to make a report.
If the role changes SOC codes, you cannot promote the person until the Home Office approves their new visa.
4. Ensure Compliance with Additional Hours for Sponsored and Non-Sponsored Workers
Sponsored Workers
Under current rules, sponsored workers on a Skilled Worker visa can only work:
- In their primary sponsored role as specified in their Certificate of Sponsorship (CoS).
- Additional hours (up to 20 hours per week) in an eligible SOC code. If they work more than 20 hours per week extra, then you need to sponsor the individual.
Don't assume that working more than 20 hours per week will be fine, and that you don't want to sponsor them because it's just 23 hours per week. This is a breach of their conditions, and it will affect your licence.
They could lose their visa, and you could be given a hefty fine of up to £60,000 per illegal worker. That's right the 3 hours they work over their 20 hours would mean that those 3 hours would be considered illegal working.
Non-Sponsored Workers (Students, Dependants, and Other Visa Holders)
Non-sponsored workers, such as students and dependants, may have restrictions on working hours:
- Student visa holders: Typically limited to 20 hours per week during term time. Breaching this condition can result in visa cancellation.
- Dependant visa holders: May work full-time, but restrictions may apply depending on their specific visa conditions.
- Visitors and certain visa holders: Some categories strictly prohibit employment. Employers must ensure they do not employ individuals who are ineligible to work.
Failure to monitor working hours can result in compliance failures and penalties for illegal working.
5. Conduct Regular Compliance Audits
To prepare for unannounced Home Office inspections, businesses should:
- Carry out regular internal audits to verify compliance with sponsorship duties.
- Train HR teams on immigration rules and record-keeping obligations.
- Ensure all documentation is readily available in case of an audit.
6. Prevent Common Compliance Pitfalls
Many businesses lose their sponsor licence due to avoidable mistakes, such as:
- Failing to notify the Home Office about changes in employment or business details.
- Not performing proper right-to-work checks.
- Allowing sponsored workers to exceed permitted additional working hours.
By staying proactive and ensuring compliance at all levels, employers can avoid penalties and safeguard their sponsor licence.
Final Thoughts
Maintaining compliance with your sponsor licence is an ongoing responsibility that requires diligence and a strong internal process. By keeping accurate records, fulfilling reporting duties, monitoring working hours, and staying updated with immigration and employment laws, your business can continue hiring overseas talent while remaining fully compliant with Home Office regulations.
Remember, don't be caught out. Always ask, how will this affect my licence.
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.
