The UK government has published several significant changes to their guidance for employers sponsoring migrant workers. We have summarised the key changes sponsors should be aware of below.

Passing on the costs of sponsorship

The Labour government promised to tackle exploitation of sponsored migrants by ensuring they are no longer saddled with sponsorship costs after recent scandals emerged of many working in the care sector facing significant debts. There is a variety of costs incurred when sponsoring a migrant worker and employers may wonder which immigration costs they can reasonably ask a prospective employee to take on or add to a clawback agreement in the case they leave their job not long after arriving on their work visa.

The new guidance adds more clarity regarding which costs employers must not pass on to sponsored employees. Previously, the only cost that was explicitly forbidden to pass on to a sponsored worker was the Immigration Skills Charge, which is payable every time a Certificate of Sponsorship is issued for a worker. A sponsor passing on the £1,000 charge (£364 for small or charitable organisations) risks losing their sponsor licence, meaning any sponsored employees would no longer be able to work for them and would have their work visas curtailed.

Home Office guidance now includes further restrictions on costs that may not be recouped. A sponsor licence will now “normally” be revoked if a sponsor recoups or attempts to recoup the Skilled Worker sponsor licence fee and any “associated administrative costs (including premium services).” This penalty now also applies for attempting to recover the cost of a certificate of sponsorship fee for a Skilled Worker assigned on or after December 31. 2024.

A sponsor licence benefits the employer and their ability to hire from abroad, so it is unsurprising that the guidance now explicitly mentions costs should not be recouped from a worker. The example of “associated administrative costs” given refers to the “premium services” charges of up to £25,000 for more bespoke UK Visas and Immigration (UKVI) customer service and expedited applications.

Employers would be wise to seek legal advice regarding any passing on of costs to migrant workers or clawback clauses in their contracts of employment.

Important changes to key personnel

There are also changes to tighten the rules on British or settled staff being among key personnel operating sponsor licences. For sponsor licence applications made from January 1, 2025, at least one Level One User must be both an employee, director or partner of the sponsor and a settled worker. Up to January 1, sponsors required Level One users who met both these requirements, but they could be two different people. The guidance warns that while existing sponsors with two Level One Users fulfilling these requirements may proceed on this basis for now, at some point in the future they may be forced to have one person in this role that fulfils all the new requirements.

This change applies to sponsors of workers including those on temporary worker visas, unless the Authorising Officer on the licence has certain types of immigration status (e.g, under the Innovator Founder or UK Expansion Worker routes), in which case sponsors do not need to have a Level One User who is a settled worker.  This will mainly affect start-ups and companies based overseas seeking to open a UK office who don’t yet have local employees. If they have nobody that meets these requirements, there are other UK immigration routes that may work for the initial steps of establishing the business, such as applying for an Expansion Worker sponsor licence on Innovator Founder visas, but a sponsor licence may still be required to bring in further workers in due course. Crucially, “settled” for the purposes of this new guidance on Level One Users, does not just apply to those with British citizenship or Indefinite Leave to Remain in the UK, it also includes people with other types of immigration status, such as Commonwealth citizens with UK Ancestry visas or pre-settled status under the EU Settlement Scheme.

The Home Office guidance has also been amended to prevent anyone legally prohibited from being a company director from being key personnel on a sponsor licence, unless a court has given the person permission to act as a director, or to promote or form a business, and as long their sponsorship role doesn’t contravene this permission.

The guidance also now confirms that any nominated key personnel must have a valid National Insurance number, unless they are exempt from requiring one.

A limited trial of the UK’s new “Sponsor UK” sponsorship system is being rolled out to sponsors of the Government Authorised Exchange (GAE) visa. Sponsors on this niche work immigration route are the first to trial the new system with only Level One users.  Eventually, all sponsors will transition to this system with no Level Two Users, so everyone with access to the sponsor management system will need to meet Level One User requirements. GAE sponsors using the new Sponsor UK IT system will therefore no longer be able to have any users at host employers.

Persons of significant control can impact your ability to sponsor

A “person with significant control” has been added to the list of people whose circumstances may impact your ability to sponsor migrant workers. The conduct of someone described as a “person with significant control” on a sponsor’s Companies House listing will now affect that organisation’s ability to obtain and keep their sponsor licence.

Sponsoring workers in a personal capacity

There is a new prohibition on sponsors sponsoring migrants “in a personal capacity,” for example where the sponsor is an individual or household and is not otherwise conducting business or providing a service in the UK, or where the workers would be employed by or engaged for the personal benefit of an individual who works for the organisation or a close relative or partner of that individual and the role is unrelated to the organisation’s wider activities.

It was already impossible to sponsor new roles for nannies and au pairs since April 2024, but now even where such domestic personnel are already being employed, it will be impossible to have a new certificate of sponsorship issued for them.

Private servants in a diplomatic household remain the only exception to this rule. In such a scenario, the diplomatic mission, consular post or international organisation must be the sponsor and meet the Home Office requirements to Sponsor an International Agreement worker. Anyone else using their sponsor licence to sponsor domestic roles such as nannies or housekeepers now risk having their licence revoked.

Care sector sponsorship

Reflecting the targeting by UK Visas and Immigration (UKVI) of sections of the care sector, some of whom have recently lost sponsor licences or faced suspensions for various breaches, new guidance refers to additional supporting evidence that those applying for a licence to sponsor carers now need. Where care providers have multiple branches, they will be required to show up-to-date status checks by their regulator, the Care Quality Commission (CQC) for each branch, as well as the head office.

Grounds for refusal

Following recent sponsor licence revocations for sponsors of care workers found to be charging carers sponsor fees to come to the UK without running a care business themselves, the guidance clarifies the position that sponsors must not behave like a recruitment agency for other organisations where sponsored migrants will work.

Sponsors may use their sponsored workers to work under their supervision for third parties in limited circumstances in order to fulfil a contractual obligation where certain requirements are met. However, if the Home Office considers an organisation applying to be a sponsor to be an employment agency supplying sponsored staff to work elsewhere (including where it is acting as an employer of record or professional employer organisation), it will be mandatory grounds for refusing or revoking a licence.

New guidance also clarifies that those applying for a sponsor licence, applying to add different immigration routes to their licence, or applying for a certificate of sponsorship for a Skilled Worker, Scale-up or Global Business Mobility worker must be able to demonstrate that they can and intend to offer genuine employment, as well as being able to meet the required salary and skill levels for the sponsored immigration routes.

Digitalisation

Biometric Residence Permits have been replaced by digital proof of right to work and are no longer being issued. New guidance reflects the transition to eVisas, as well as when short-term passport vignettes and ink stamps suffice. You can find more details on the digitalisation of immigration proof here.

Immigration fee rises

A draft immigration and nationality fees amendment order was also published this month, along with an explanatory memorandum issued by the Home Office to accompany the legislation. With the assent of both houses likely later this year, the legislation is set to raise the maximum chargeable for certain immigration costs. Fee changes usually take effect around the start of the tax year.

Of particular note to employers in this order is a hike in the potential maximum the Home Office may charge for a certificate of sponsorship for a worker; up to £525 from the current fee of £239.  

Actions to take

HR teams should review their right to work and sponsorship policies, key sponsoring personnel, terms of employment and correspondence with sponsored staff to ensure they are compliant with the latest guidance.

As well as recent increases in enforcement and penalties, ministers have announced stronger measures will be added to the Employments Rights Bill to penalise sponsors who “repeatedly defy visa rules.” Enforceable action plans for UK sponsors found not to comply with immigration rules will be quadrupled from three months to a year – even for “minor visa breaches,” according to the Home Office. Whilst such plans are in place, employers are restricted from hiring more overseas workers. For repeat offenders, the “cooling off” period before a sponsor whose licence has been revoked can apply for a new one will be doubled, from a maximum 12 months to at least two years. Needless to say, compliance is more important than ever.

With any migrant staff you intend to sponsor we always explore whether any non-sponsored immigration options are available (such as ancestry or global talent) and whether they would be more advantageous to pursue. As sponsorship costs continue to rise, it’s always worth investigating all options for securing the talent you need.