Are you ready to be a Sponsor? Practical considerations before embarking on Sponsorship
April 30, 2020
Country / Territory
It appears that even a global pandemic causing international shutdowns will not slow the government’s progress in implementing changes to the UK’s Points Based System.
Following its policy announcement on 19 February 2020, which provided an overview of what EEA nationals arriving from January 2021 will need to satisfy for a work visa, there have been several recently published updates. Of particular note is the government’s recommendation for employers to consider applying for a Sponsor Licence now:
“Employers not currently approved by the Home Office to be a sponsor should consider applying now if they think they will want to sponsor skilled migrants, including from the EU, from early 2021.”
During the current COVID-19 crisis, applying for a Sponsor Licence in preparation for January 2021 may be far from the minds of many employers. Nevertheless, 31 December 2020 is not that far away, so the government’s recommendation should be heeded—but approached with caution.
Open Season?
The government’s wording may be interpreted as “open season” for employers to apply for a Sponsor Licence. However, before applying, prospective Sponsors must ensure they understand and satisfy the criteria to hold a Sponsor Licence, as well as the ongoing compliance obligations imposed upon all Sponsor Licence holders.
The sponsor criteria and obligations are applicable both to employers making a first application and those adding an additional Tier 2 category to an existing Tier 4 or 5, or single limb Tier 2 (General) or Tier 2 (ICT) Sponsor Licence.
Proper consideration of these factors should serve to slow hasty applications. Our experience shows that employers that do not fully understand or appreciate their obligations are the ones primarily at risk for a refused application or revocation of a Sponsor Licence.
Of course, a prospective sponsor must consider whether a Sponsor Licence is the appropriate decision for its business. For example, if the purpose is solely to employ an EEA national from January 2021 onwards, sponsorship may not be required if that individual is already in the UK with either Pre-Settled or Settled Status under the EU Settlement Scheme, or if they have since acquired British nationality.
Genuine Employment and Vacancy
In a break from the norm, the recently updated guidance (Tiers 2 and 5: guidance for sponsors – version 4/20 (“the Guidance”)) explicitly states that purely speculative Sponsor Licence applications will be accepted where it is for the purpose of sponsoring either EEA or non-EEA nationals from January 2021 onwards.
All the criteria and obligations in the Guidance must be satisfied, except that purely speculative applications for sponsorship from January 2021 onwards are required to demonstrate an ability to offer genuine employment at minimum skill level RQF3 (A Level equivalent) or above. All other prospective sponsors, such as those needing to sponsor workers during 2020, will need to do so at RQF6 (Degree Level) or above.
Another vital suitability criteria to be considered is the “genuine vacancy,” described in the Guidance as one which:
“• requires the jobholder to perform the specific duties and responsibilities for the job and meets all of the requirements of the tier and category - if you have already assigned a CoS, the vacancy must be for the period of employment stated on the CoS
• does not include dissimilar and/or lower-skilled duties”
Clearly, if the application is purely speculative the genuine vacancy requirement will be impossible to satisfy, and the Guidance suggests this will be accepted. This is a welcomed relaxation of the current requirements and will enable employers to strategically plan for future recruitment, with the reassurance of knowing they will have the infrastructure to provide sponsorship to European nationals in the future. However, prospective sponsors who intend to sponsor a non-EU national worker during 2020, or where a specific role has been identified, must continue to meet this requirement.
The reality is, when preparing a Sponsor Licence application, the genuine vacancy requirement translates as an assessment of the specific role for which the employer intends to sponsor a worker. Where a migrant worker has been identified to fill the role, it is currently a mandatory requirement to provide details of the role, such as job title and duties, salary and personal details. Further, where the Resident Labour Market Test (“RLMT”) is required, evidence of a compliant RLMT must be submitted with the application. We receive numerous enquiries from employers whose Sponsor Licence applications have been rejected as a result of failing to provide this information at the outset.
Home Office Audits and Compliance Obligations
All Sponsors must be able to comply with the criteria and obligations set out in the Guidance. These obligations are in force immediately, regardless of whether there are any sponsored migrants, which speculative Sponsor Licence applicants will need to keep in mind.
As part of the Sponsor Licence application process, the Home Office may decide to conduct a compliance audit at the premises of the prospective sponsor. In addition, once a Sponsor Licence has been granted, the Home Office can audit a Sponsor at any time, announced or unannounced. The purpose of the audit is for the compliance officer to assess the employer’s suitability to be a Sponsor and its ability to meet its compliance obligations.
We regularly find that many of these obligations are not that obvious to new Sponsors and on which many existing Sponsors require a regular reminder:
- Right to work checks, which comply with Lists A and B of the Home Office guidance, must be carried out on every employee. It may also be required for contractors and self-employed workers.
- Tracking and monitoring sponsored migrants to ensure they are carrying out the work as specified on the CoS, during the specified working hours and receiving the salary stated. We regularly assist clients in establishing policies and procedures to do so effectively.
- Retention of the necessary documentation to provide evidence that the Sponsor is compliant with its obligations relating to the business, right to work checks and all sponsored migrants. In particular, the recruitment of sponsored migrants such as the RLMT. Sponsor Licences can be revoked in the most serious failures of this type.
- Reporting on changes to sponsored migrants and the Sponsor’s business. In our experience, Sponsors often overlook such reporting, which can result in a poor audit outcome or a licence being revoked if such events go unreported. Our team is frequently approached with changes to a Sponsor’s key personnel or ownership structure that are late in being reported, as internal messaging with respect to corporate changes often encounter delays when coming from legal to those who are responsible for upholding the Sponsor Licence.
The severity of Home Office action against a non-compliant Sponsor cannot be overlooked. The suspension or revocation of a Sponsor Licence can heavily impact the business and can have disastrous consequences for the sponsored workforce. In particular serious compliance breaches, financial penalties and criminal convictions may also be levied.
It is therefore essential that all Sponsors fully understand these obligations and ensure they have—or put in place—the necessary measures to demonstrate these can be satisfied to the Home Office, before the Sponsor Licence application is submitted.
If you have any queries or require assistance with a Sponsor Licence, please contact Fragomen’s dedicated Compliance and Audit team at [email protected] or Victoria Welsh directly at [email protected].
