Sponsor Licence

Sponsor Licence System Reform By The UK Government

By Amer Zaman

on May 23, 2022

Read Time: 9 Minutes

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What will the more automated sponsor license system mean for you?

In August 2021, the Home Office issued ‘The UK’s Points-Based Immigration System Sponsorship Roadmap’. This document set out to explain what changes would be coming to the sponsorship application process and what it means to organisations and colleges that want to bring people to the UK.

The current system is seen by the Government as too slow. Consequently, government ministers are looking to speed up the process for sponsors and the Home Office.

One way that they plan to do this is by automating the sponsor licence system so that checks are faster and easier.

These reforms are part of the Government’s wider process of evolving its immigration strategy post-Brexit. Many parts of the roadmap have already been implemented, but what will these and future changes mean for you?

The sponsor licence regulation shakeup is a core element of the new UK points-based system

One of the issues that has always been raised by organisations and colleges is that it takes a long time for sponsorship applications to be processed. This would sometimes mean that workers and students would not have their applications processed in time, or there would be complications.

Because the Government understands that more workers are now needed in key areas such as healthcare and other skilled worker jobs, it wishes to make the process faster. However, the Government also wants to set out specific requirements that businesses and educational institutions must comply with in order to gain a trustworthy reputation.

Automated salary checks for employers

As part of the new points-based sponsorship system, the Government wants sponsors to “undergo checks to demonstrate they are a genuine business, are solvent, and that the roles they wish to recruit into are credible and meet the salary and skills requirements (if applicable)”.

Sponsors are therefore expected to check the salaries of existing employees at the company and ensure migrant workers are paid at the same rate.

To enforce this requirement, the Government will be linking the system to HM Revenue & Customs, so that data can be collected and checked. This system should make misuse of the Skilled Worker visa easier to identify.

A pilot for this new automated salary check was launched in the fourth quarter of 2021. Any existing applications will be considered under this pilot system, so it is vital that employers are checking their migrant workers’ salaries to ensure these are in line with legislation.

Where there is a shortfall, employers should make up the difference so that the checks can pick this up.

One of the only potential downfalls for this system concerns the accuracy of the data the HMRC system collects on those employers that don’t use the PAYE (Pay as You Earn) system.

Not all companies are required to use PAYE, but this also means they do not routinely send payroll data to HMRC. This could lead to unfair discrimination against these companies.

What changes did the roadmap set out for the sponsorship system in 2021?

With the sponsorship system reforms for 2021, the Government aimed to “remove and demystify perceived barriers to use of the system, enabling businesses to feel confident in making future investment decisions with a degree of certainty, especially when they have not used the system before”.

The redesigned sponsorship system was intended to meet three key objectives:

• Speed up the end-to-end application process
• Improve a sponsor’s experience of using the sponsorship system
• Prevent abuse of the points-based system

The Government also pledged, in addition to salary checking, the following measures for 2021:

• Developing a service that could support small and micro-businesses as well as working with business stakeholders
• Reviewing the sponsorship fees to ensure they were fair as the new system went live
• Introducing a Skilled Worker eligibility tool to help prospective employers and workers with checking if a particular job is eligible under the Skilled Worker route
• Investigating how the documentary evidence needed to become a licensed sponsor might be simplified in order to make the process faster and easier for sponsors to understand

An emphasis on compliance

The Home Office is keen to ensure that companies and their migrant workers are compliant with the rules. Steps the Home Office is set to take include:

• Making the relevant checks on all potential sponsors so that the Home Office can see any past criminality and immigration offences
• Using compliance visits throughout the application process and during the period of the licence to ensure sponsors can carry out their sponsorship duties correctly
• Monitoring key protections for workers, such as the maximum 48-hour working week
• Targeting compliance visits at those sponsors who are deemed a higher risk or have no history of compliance

Penalties for non-compliance can include “conditions or limits on recruitment, managed action plans, or suspension and revocation of a sponsor licence”.

How to avoid non-compliance

For companies that are looking to apply for a sponsorship licence, the new system will make the process easier. However, there will also be more checks to ensure compliance as well as sanctions for companies failing to comply. So, how can employers avoid non-compliance and ensure they have a good standing?

• Compliance visits are mentioned as one way to ensure employers are not exploiting migrant workers. To ensure you are prepared for these visits, it is a good idea to always have evidence available that you are complying with the rules. This could be in the form of copies of passports and work visas. Another possible way to ensure you are doing the right things is to run mock visits with the help of an immigration law professional or your solicitor. They will then be able to see if the evidence you are exhibiting would be enough to satisfy a Home Office compliance visit.
• Another way to maintain compliance is to have procedures in place to ensure your migrant workers are working to the same parameters as your other workers. This can mean ensuring the48-hour working week is maintained, and any health and safety rules apply to migrant workers as well.
• Appropriate training should also be given to both migrant workers and existing staff so that both are aware that compliance is essential. This means not allowing any work practices that could cause an issue during a visit. It also involves ensuring that migrant workers are treated the same as any other worker in the company.

What do these reforms mean for workers?

For migrant workers, this new system should make the application process easier. However, you still need to ensure you meet the criteria.

• Firstly, you need to know if the job you are applying for is on the list of those eligible for a Skilled Worker visa. There is a list of occupations and accompanying codes that you can use in your application under Tier 2 of the points-based system. You can also apply under Tier 2 if you are a minister of religion, an elite sportsperson or part of a multinational company transfer. Certain temporary workers under Tier 5 of the points-based system can also apply.
• You also need to have a job offer from an approved employer, or ensure your employer is applying for a sponsor licence.
• You also need to ensure that you can speak, read and write to a specific level.
• There is also a minimum wage requirement that you need to be paid to satisfy the rules.

There is an online tool that can now assess your eligibility for a Skilled Worker visa.

• You will need to show that you have enough money to pay the application fee. This will be cheaper if your job is on the shortage occupation list.

What do these reforms mean for employers?

As an employer, there will be even more emphasis on following the rules. With many of the checks moving to online automated searches, you need to ensure your data is up to date on HMRC and other Home Office systems.

Although many businesses are not required to use PAYE, you may need to consider if switching to PAYE could ease your efforts to obtain a sponsor licence.

Although the application process should be faster under the new reforms, companies that are new to the system should seek help from a professional used to dealing with immigration law. They can give you valuable advice and steer you in the right direction. They can also check your business and working practices to see if you would pass a compliance visit.

The Home Office is clearly looking to improve the application process for employers wishing to apply for a sponsor license. This has always been a sticking point in the past and needed to be overhauled.

While this system will have some bedding-in time, and not be available to all straight away, it will hopefully deliver on the aims the government is setting out in the ‘The UK’s Points-Based Immigration System Sponsorship Roadmap’.

You can get tailored advice on your own circumstances and needs as a business or individual by contacting our business immigration team in London. Please do not hesitate to call Cranbrook Legal today on 0208 215 0053.