Can UK Business Owners Recoup their Immigration Costs from their Employees
There is a lot of financial pressure on UK business owners now. They are being squeezed with higher mortgage and bank loan interest rates. Their customers have less cash to spend because of the cost-of-living crisis.
Amid these economic woes, the UK government decided to increase some immigration fees resulting in a cost increase to UK businesses of sponsoring an employee from overseas on a Skilled Worker Visa or other type of work visa or business visa.
Some UK business owners say they are in a ‘lose-lose situation’ because they cannot pass on the increased costs to their consumers as their customers do not have the spending power to withstand a further hike in fees. Nor can they avoid the extra immigration fees as they cannot recruit from within the UK due to the UK skills shortage. That shortage is outside the individual control of any one company.
The question sponsor licence holders are asking their Immigration Solicitors is whether they can recoup their added immigration costs from their sponsored employees.
UK Online and London-Based Immigration Solicitors and Sponsorship Licence Lawyers
For sponsor licence and business immigration advice call OTS Solicitors on 0203 959 9123 or contact us online.
Recouping immigration fees
UK business owners are interested in recouping immigration fees paid for Skilled Worker Visa or other work visa holders in circumstances where:
- The new employee accepts the job offer but then changes their mind
- The new employee does not pass the probationary period
- The employee leaves their employment after a short period and before the sponsoring employer has had the benefit of their employment although the employer has paid out for things, such as the certificate of sponsorship to enable the employee to apply for a Skilled Worker Visa or for the immigration skills charge or, on a voluntary basis, the immigration health surcharge
You may say that the answer is to pay the bare minimum for new sponsored employees. In other words, only pay the immigration skills charge and the certificate of sponsorship but do not offer to pay the Skilled Worker Visa application fee, the immigration health surcharge or any dependent visa fees.
That advice is only realistic if there are loads of UK or overseas job candidates to fill the job vacancies. In a situation where your competitor firms are offering ‘golden hellos’ and employee incentive packages, it is a lot harder to attract recruits if you are not willing to offer similar employee benefit schemes.
Sponsor licence costs
Sponsorship Licence lawyers say it is helpful to break down your business sponsor licence costs into ones that fall within overheads and those that relate to an individual employee.
The general sponsor licence costs include:
| Item | Cost for a small business or charitable organisation | Cost for a medium to large business |
| First sponsor licence application fee | £536 | £1,476 |
| Renewal sponsor licence application fee (every 4 years) | £536 | £1,476 |
| Premium service use (you can decide whether to add on premium service fees payable to the Home Office or use their standard service) | £0 to £8,000 | £0 to £25,000 |
On top of the fees payable to the Home Office, there are also the ‘hidden fees’. For example:
- Training your key personnel
- Auditing files
- Preparing for Home Office compliance visits
- Ongoing sponsor licence management
- Sorting out sponsor licence problems. For example, if your business faces its sponsor licence being downgraded or suspended and must pay for a Home Office sponsor licence action plan at a cost of £1,476
Sponsorship Licence lawyers say that some of these costs can be minimised by working with your business immigration lawyers. For example, using a professional sponsor licence management service and paying a fixed monthly retainer can be cheaper than asking HR staff to undertake key personnel roles and then having to recruit additional HR staff to act as Level one users or Level two users or pay for bespoke training or additional HR file auditing.
If you are interested in finding out more on how using a professional sponsor licence management service could save your business money call OTS Solicitors on 0203 959 9123 or contact us online.
The head of our business immigration team, Hans Sok Appadu, will be happy to talk through the figures with you to see how much you could save. As an added extra benefit, HR staff will not have to juggle their HR role with key personnel duties so HR staff retention and job satisfaction may improve.
Individual costs of sponsorship
As well as the business overhead costs of sponsorship there are individual costs of sponsorship payable for each sponsored overseas employee.
These individual costs can be broken down into the payments that must be made by a sponsor licence holder and those that are the responsibility of the recruit but, as an employer, you have decided to pay. The likelihood is that you may feel you have no choice if all your competitors are offering new joiner packages to encourage overseas-based recruits to join their company.
The payments to the Home Office that the company must make are:
- Certificate of sponsorship fee - £239 per recruit
- The immigration skills charge – unless the job is exempt from payment. For example, if you are recruiting an employee on a Skilled Worker Visa as a chemical scientist, with standard occupational classification code 2111, the job is exempt from the immigration skills charge payment
The cost of the immigration skills charge is again based on the size of your company or if your organisation has charitable status.
The current immigration skills charge fees are:
- £364 for the first 12 months if you are a small company or have charitable status and then £182 for each additional 6 months or
- £1,000 for the first 12 months if you are a medium to large company and then £500 for each additional 6 months
These fees are for each 12 months or additional 6 months of the worker’s visa. They must be paid upfront so if you are a large employer recruiting a Skilled Worker Visa applicant on a 3-year visa that is an extra £3,000 to find for each sponsored employee
The immigration skills charge can be recouped from the Home Office if the sponsored employee leaves your employment before their visa ends but that is an extra hassle for you.
Visa holder costs
The visa applicant needs to pay various fees associated with taking up sponsored employment in the UK.
The fees include:
| Visa and associated items | Cost |
| Skilled Worker Visa fee | £719 to £1,500 (depending on the length of the visa and if the application is made within the UK or from overseas) |
| Immigration health surcharge | Currently £624 per year (but rising to £1,035 per year in mid-January 2024) |
| Priority service fees | £0 to £500+ depending on whether this service is chosen |
| Dependent visa fees | The dependent visa costs depend on whether the worker is bringing their partner or children and the length of their visas |
On top of those fees, the visa applicant may need to have the maintenance requirement in their ban account (currently £1,270) as part of their visa application and must fund travel costs and accommodation.
Like the immigration skills charge, individual visa fees must be paid upfront rather than annually. That means for a Skilled Worker Visa applicant with a spouse and 2 children applying for 3-year work and dependent visas, the fees run into thousands of pounds.
With the global skill shortages in some areas, it is not surprising that some UK employers think they have to offer to pay all or some of these individual fees to encourage suitable job applicants to come to the UK to live and work.
Recouping individual immigration fees from employees
A UK employer cannot recoup general sponsor licence overheads from an employee. For example, the sponsor licence application fee or the immigration skills charge. Sponsorship Licence lawyers say this must not be attempted as it would put your sponsor licence at risk of revocation.
However, if you offer to pay individual visa costs to encourage a visa applicant to choose to relocate to the UK instead of to a country with lower visa fees, or to work for your company rather than for a competitor, then you may want to recoup that incentive payment if the sponsored employee decides to leave your employment.
This can be achieved by a recoupment or clawback clause in the worker’s employment contract but it is not necessarily straightforward as the recoup provision cannot be too onerous. If it is then it could be classed as a restraint of trade.
It is recommended that Sponsorship Licence lawyers and employment law solicitors check the wording of the employment contract to advise on it and its practicalities.
For example:
- If your employee has worked for you on a Skilled Worker Visa for 18 months it is not reasonable to require them to repay all the fees but a proportion of the visa fees and immigration health surcharge or specialist training costs
- If your sponsored employee does not start their employment in the UK as they change their mind before travelling, you are unlikely to be able to enforce an agreement that they refund fees. A better option is to agree to repay the worker the fees once they have arrived in the UK and started their employment or completed their probationary period
Our Sponsorship Licence lawyers and employment solicitors can assist you with all your sponsor licence and employment law queries.
UK Online and London-Based Immigration Solicitors and Sponsorship Licence Lawyers
For sponsor licence and business immigration advice call OTS Solicitors on 0203 959 9123 or contact us online.
Related Posts
OTS Solicitors Celebrates its Inclusion in the 2024 Chambers Guide to the Legal Profession
How Much Does it Cost a UK Sponsor to Hire a Skilled Worker From Overseas?