Ban on Employers Passing on Sponsorship Costs to Employees on Skilled Worker Visas
The Home Office has updated its guidance to sponsor licence applicants and holders of sponsor licences. The revisions relate to the employment-related charges employers can try to recoup from overseas workers on Skilled Worker Visas.
In this blog, our UK Immigration Lawyers look at how the rule changes will affect businesses with sponsor licences.
UK Online and London-Based Immigration Solicitors and Sponsorship Licence Lawyers
For sponsorship licence advice call OTS Solicitors on 0203 959 9123 or contact us online.
What is the new Home Office recoupment guidance?
The new Home Office guidance says the Home Office will normally revoke your licence if:
- You assign a certificate of sponsorship to a sponsored employee on or after 31 December 2024 and you have asked the employee to pay some (or all) of the certificate of sponsorship fee, or you have recouped, or attempted to recoup, some (or all) of the fee from the employee
- You applied for a sponsor licence (or asked to amend your licence to sponsor Skilled Worker Visa applicants) on or after 31 December 2024 and you asked a sponsored employee to pay some (or all) of the sponsor licence fee or the associated licence admin costs, or you have recouped, or attempted to recoup, some (or all) of the licence costs from the sponsored employee
The fees that cannot be recouped include priority fees paid by businesses for fast Home Office licence decisions.
There is no specific reference to the recoupment of the immigration skills charge because recoupment of the immigration skills charge is already banned.
The revised Home Office guidance
The revised Home Office guidance is:
- Workers and Temporary Workers: guidance for sponsors part 3: sponsor duties and compliance
- Workers and Temporary Workers - guidance for sponsors part 1: apply for a licence
Why has the Home Office changed its recoupment guidance for licence holders?
The Home Office has changed its guidance because:
- There was a concern that some employers were exploiting vulnerable overseas workers and placing them in visa debt
- The government wants UK businesses to train and recruit workers from within the UK rather than rely on overseas workers and global mobility
The government has been particularly concerned that carers in the care sector on Health and Care Worker Visas have been exploited and ‘enslaved’ as carers were reportedly unable to leave their sponsored employment if doing so would trigger substantial recoupments.
Is the ban on employers passing on sponsorship costs fair?
At first glance, the ban on passing on sponsorship costs seems fair as employers should be better able to afford sponsorship fees than their sponsored employees. However, when you carefully look at the ban it can seem unfair when you consider:
- Many employers try to recoup training costs from UK employees who leave their employment after the firm has paid substantial training fees on their behalf. Why is that different to the fees associated with sponsoring an employee when all employers with sponsor licences are doing is recruiting from overseas to get an already trained skilled employee?
- Why are sponsor licence holders being penalised for shortfalls in UK training and education meaning the employer is forced to incur the additional costs of sponsoring staff on Skilled Worker Visas?
- Why can't Skilled Worker Visa applicants decide if they are prepared to pay fees or have the fees recouped or claw backed – many visa applicants may say that they would prefer to repay monies rather than miss out on the opportunity of a certificate of sponsorship
How will the revised Home Office guidance affect your business?
If you are applying for your first sponsor licence, you need to consider whether the new rules will affect your decision to sponsor overseas workers on Skilled Worker Visas. This will be relevant if you had intended to recoup some costs. You may need to reconsider and adjust recruitment budgets.
If you have an existing sponsor licence, you need to review your recruitment and HR policies and employment contracts to see what recoupments you have historically made and ensure that you don’t make them in the future.
What happens if a business doesn’t follow the new Home Office recoupment guidance?
If you do not follow the new Home Office guidance you risk the revocation of your sponsor licence. If your licence is ended by the Home Office you can't:
- Continue to sponsor your current employees on Skilled Worker Visas or Work Visas authorised under your licence
- Recruit any new sponsored employees
- Apply for a new sponsor licence until the cooling-off period has ended
What are the risks associated with sponsor licence revocation?
With the revocation of your sponsor licence, you risk:
- Reputational damage
- Sponsored employees moving to work for competitors with sponsor licences
- Inability to fill vacancies as you can't hire or sponsor staff from overseas
- Being unable to meet contractual commitments or expand because of staff shortages
- Increased difficulty in getting a sponsor licence when you make a fresh application at the end of the cooling-off period
Legal assistance for sponsorship applications and licence management
With stricter guidance and increased enforcement, it’s a tough time to be a business owner, HR director, a member of the HR team or part of the key personnel staff.
The Work Visa and Sponsorship Lawyers at OTS Solicitors are recommended by Legal 500 and provide proactive, commercially aware legal advice to sponsor licence applicants and holders. We can help your business whether you are a start-up, a family business, a franchise, a joint venture or a multi-national company with branches in the UK.
All our business clients get excellent service from our Immigration Lawyers in London consisting of up-to-date sponsorship legal advice on changing Home Office guidance and the UK immigration rules delivered efficiently and cost-effectively.
Our sponsor licence services include:
- Pre-licence advice including pre-application audits to check you are ready to make your first sponsor licence application
- Application advice for Self-Sponsorship Visas
- Full sponsor licence application service
- Immigration Law Training on all your sector-specific ongoing sponsor licence issues
- Full Sponsor Licence Management Service
- Advice on sponsor licence compliance
- Help if your sponsor licence is at risk of suspension or revocation
- Applications for judicial review if your sponsor licence has been downgraded or revoked
- Employment law advice tailored to your business needs
Our team of specialist Sponsorship Licence Lawyers can help with all things sponsor licence-related. Please contact a member of our team for UK immigration legal advice.
UK legal assistance for immigration and business sponsorship
For sponsorship and immigration advice call our Sponsorship Lawyers in London on 0203 959 9123 or contact us online.
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