Sponsor Licence Compliance: Home Office Announces Tougher Measures For Employers
In This Article
1. Home Office Crack Down on Immigration Law Breaches and Sponsor Licence Requirements
2. Longer Cooling-Off Periods for Sponsor Licence Revocation
3. Extended Action Plans for Sponsor Licence Compliance
4. Preventing Sponsors From Passing Sponsorship Costs to Employees
5. Aligning Immigration and Employment Laws for Sponsor Licence Holders
6. Steps Employers Can Take to Safeguard Their Sponsor Licence
7. Contact Our Immigration Barristers
8. Frequently Asked Questions
9. Glossary
1. Home Office Crack Down on Immigration Law Breaches and Sponsor Licence Requirements
At the end of November, the Home Office announced a planned ‘crack down’ on businesses found to be in breach of immigration laws and sponsor licence requirements. While it seems that the announced changes would not involve a significant shift from the current position, the announcements nevertheless suggest that the Government wishes to be seen as taking a stringent approach to any breach of immigration laws and worker exploitation. This article discusses the proposed changes and the steps businesses can take to protect themselves and their employees.
2. Longer Cooling Off Periods for Sponsor Licence Revocation
Currently, following revocation of a sponsor licence, an employer cannot apply for a new licence for a period of at least 12 months. This period is referred to in Home Office guidance as a ‘cooling off period’. The Home Office announcement indicates that, under proposed changes, where there are repeated or serious breaches of sponsor duties, a sponsor licence will be revoked, and the period during which sponsors will not be able to reapply for a sponsor licence will be increased to 2 years. Although the Home Office’s statement indicates that the current maximum length of sanctions is 12 months, it is important to note that, while 12 months is the usual length of the current cooling off period, cooling off periods of more than 12 months can currently be imposed in some circumstances. In particular, a cooling off period can be longer than 12 months where the licence was revoked due to the imposition of certain civil penalties or criminal convictions: see our previous article Cooling-Off Periods in Sponsor Licence Applications and the Guidance for Sponsors Part 1: Apply for a Licence.
The Home Office announcement states:
‘Currently, employers who flagrantly flout visa rules can only be sanctioned for a maximum of 12 months. Under our changes we intend the period for repeat offences to be at least 2 years, double the current length, with final cooling off periods announced in due course.’
A written statement of the Minister for Migration and Citizenship, Seema Malhotra, indicates as follows:
‘We will take strong action against employers who do not comply with the rules, where necessary revoking their sponsor licence. We will strengthen this by making it harder for those with a long-term record of noncompliance to return to the sponsor register. The current penalties for breaking visa rules are too weak, with all revoked businesses only facing 12 months of sanctions – regardless of their track record. That is why we will be introducing longer cooling off periods for businesses that repeatedly flout these rules or commit serious immigration breaches, barring them from applying for a sponsorship licence over this period and therefore hiring overseas workers.’
3. Extended Action Plans for Sponsor Licence Compliance
The Home Office has the power to carry out a compliance check on businesses that have applied for a sponsor licence and during the period for which a business holds a sponsor licence. These checks can include an on-site visit. The purpose is to check whether a licensed sponsor is complying with all of their sponsor duties. If, during a compliance check, the Home Office finds minor breaches of sponsor licence duties, they may ‘downgrade’ an employer’s sponsor licence rather than suspending or revoking it. This means the Sponsor will be given a ‘B’ rather than ‘A’ rating on the published register of licensed sponsors. Sponsors who are downgraded to a ‘B’ rating are given an action plan, which sets out the steps they must take to return to an ‘A’ rating. Restrictions are imposed on employers whilst an action plan is in place; for instance, employers cannot assign a Certificate of Sponsorship to any new workers during this period. Currently, action plans are imposed for a maximum of 3 months. At the end of this time, if a sponsor has not met the requirements of their plan, or more serious areas of non-compliance have arisen, their sponsor licence will be revoked.
The announcement states that the government intends to increase this period to up to 12 months:
‘Action plans bind businesses who commit minor visa breaches to a set of specific actions to help them improve and correct any issues. These are being strengthened further, with the maximum time they can be applied quadrupled from 3 to 12 months, ensuring long-term and sustained compliance with visa rules.’
While in her written statement, Seema Malhotra, also referred to the restrictions on businesses whilst action plans are in place, these do not appear to mark a change from the current position set out in the guidance, as outlined above. Seema Malhotra’s statement was as follows:
‘[…] Current rules impose Action Plans on businesses for only 3 months, but today we are committing to extending this to up to 12 months. While these longer Action Plans are in place, employers will be restricted in how they can use their licence, including limiting or removing the ability to sponsor overseas workers. If they do not comply with the Action Plan, fail to pay for the plan or make the necessary improvements by the end of their Action Plan, their sponsorship licence will be revoked.’
4. Preventing Sponsors From Passing Sponsorship Costs to Protect Their Sponsor Licence
The Home Office statement sets out that companies will be prohibited from passing on to migrant workers the costs of sponsoring them. In her statement, Seema Malhotra explains that businesses recruiting internationally will be required to pay for certificates of sponsorship, sponsor licences and the associated administrative costs themselves. It should be noted that it is already contrary to the Immigration Rules and guidance to require a worker to pay certain fees. For example, if a sponsor is liable to pay the Immigration Skills Charge in respect of a worker and attempts to recoup some or all of the charge from them, this is grounds for revocation of a sponsor licence (see Annex C2 of the Guidance for Sponsors Part 3: Sponsor duties and compliance).
5. Aligning Immigration and Employment Laws for Sponsor Licence Holders
The Home Office statement also indicates the Government’s intention to consider immigration compliance alongside employment law requirements. The statement set out as follows:
‘These changes will be made alongside the government’s new Employments Rights Bill, which is currently going through Parliament. Under the bill, the newly-established Fair Work Agency will bring together existing state enforcement functions including regulations for employment agencies and employment businesses, enforcement of the National Minimum Wage, Statutory Sick Pay and the licensing regime for businesses operating as ‘gangmasters’ in certain sectors.’
However, the current Guidance for Sponsors: Part 3 makes clear at paragraph C1.48 that ensuring compliance with wider UK law is already part of a sponsor’s duties. It is specifically stated that this includes ‘complying with UK employment law, including, but not limited to, National Minimum Wage, the Working Time Regulations, and (where required) enrolling your employees on a pension scheme’.
6. Steps Employers Can Take to Safeguard Their Sponsor Licence
In conclusion, it appears that many of the proposed changes do not represent significant shifts from current Home Office policy as set out in the Guidance for Sponsors. Nevertheless, the announcements demonstrate the Home Office’s clear intention to be seen as taking a tough stance towards employers who breach the Immigration Rules and Guidance. For example, the statement cites statistics on increased numbers of immigration enforcement visits and emphasises the number of sponsor licence revocations in particular sectors. This approach aligns with the increased penalties introduced in February 2024 for employers found to be employing individuals without the right to work in the UK (illegal workers), as discussed in our earlier article Fines For Employing Illegal Workers Set To Rise Significantly and our Guide to Immigration Civil Penalty Notices.
Given this approach, it is important for sponsors to ensure that they are complying with their sponsor duties, in preparation for potential compliance checks and visits. In this regard, sponsors may wish to consider arranging an immigration audit. See our earlier post: How An Immigration Audit Can Safeguard Your Sponsor Licence.
Our Guide to Record Keeping and Compliance may also serve as a useful introduction and refresher on Sponsor Licence Duties.
For specialist advice on sponsor licensing and compliance, contact our business immigration team using the details below.
7. Contact Our Immigration Barristers
For expert advice and assistance in relation to Sponsor Licence compliance, or other immigration matters, contact our immigration barristers in London on 0203 617 9173 or via the enquiry form below.
