With severe penalties for employers that get it wrong, Vanessa Ganguin summarises the latest guidance on the sponsorship and visa costs that can and can’t be passed onto a migrant employee.
The UK government has published some important changes to guidance for employers sponsoring migrant workers.
These include fulfilling ministers’ promises to stop unscrupulous employers trapping sponsored migrant workers with debts from their immigration costs.
The UK has one of the priciest work immigration systems in the world. Last year, a Royal Society analysis found that our upfront immigration costs have increased by 126% since 2019 and are now second only to the USA for skilled workers.
Immigration costs
Costs include applying for a sponsor licence (up to £1,476), the visa fees (up to £1,636) and Immigration Skills Charge (up to £1,000 per year) payable for every sponsored employee, as well as their Immigration Health Surcharge (up to £1,035).
Another cost is the advice of immigration practitioners – we are sometimes asked which of these charges sponsors can ask a potential hire to incur, or include in a clawback agreement in case they leave their job not long after arriving on their work visa.
Combatting exploitation
This issue has been complicated by recent scandals of care sector sponsors saddling workers with hefty sponsorship costs, leaving them vulnerable to work-related debt.
This prompted the latest change to sponsor guidance, fulfilling a promise made by immigration minister Seema Malhotra at the end of last year to tackle such exploitation.
“To combat this,” she vowed, “we are now taking action to ensure that if a business wishes to recruit internationally, they will be required to pay for certificates of sponsorship, sponsor licences and the associated administration themselves.
“This will end the intolerable practice of recovering these costs from workers, which has led to the exploitation and unfair treatment of staff, particularly care workers who have been left in debt to their employers.”
Malhotra has promised that the changes would first apply to the Skilled Worker route, before being rolled out to other sponsored employment routes.
What about sponsorship costs?
Previously, the only cost sponsors were explicitly forbidden to pass onto a sponsored worker was the Immigration Skills Charge – which is payable every time a Certificate of Sponsorship is issued for staff on a Skilled Worker or Senior or Specialist Worker visa.
Sponsors charging a migrant for this risk losing their sponsor licence. This serious sanction would mean any sponsored employees could no longer work for the employer and would have their work visas curtailed.
Home Office guidance now adds that a sponsor licence will also “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)”.
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 guidance says “associated administrative costs” includes “premium services” – these are the fees of up to £25,000 for more bespoke UK Visas and Immigration (UKVI) customer service and expedited applications. It is unclear whether “associated administrative costs” also extends to fees for legal advice.
The new guidance also warns that sponsors attempting to recover the cost of a certificate of sponsorship fee for a Skilled Worker assigned on or after 31 December 2024 would “normally” lose their licence.
Which costs can an employer pass on?
There is no explicit prohibition in the sponsor guidance of passing on or adding a clawback clause to an employment contract to recoup UKVI visa fees, priority services for a speedier decision on a visa, the Immigration Health Surcharge or fees for legal advice on an employee’s permission to stay in the UK, enter or extend their visa.
However, employers should seek legal advice before passing on any costs to migrant workers or adding clawback clauses in their contracts of employment. As well as breaches of their sponsor duties, they run the risk of falling foul of employment and contract law.
Other significant changes
For sponsor licence applications made from 2025 onwards, at least one Level One User on the licence must be settled or a UK citizen as well as an employee, director or partner of the sponsor.
Anyone legally prohibited from being a company director must not be key personnel on a sponsor licence, unless a court has given them permission to act as a director or to promote or form a business and their sponsorship role does not contravene this permission.
In the light of these changes, HR teams should review sponsorship policies, as well as checking terms of employment and any correspondence with sponsored staff.”
A “person with significant control” on a sponsor’s Companies House listing has been added to the list of people whose conduct may impact your ability to sponsor migrant workers.
There is also a new prohibition on sponsors sponsoring migrants “in a personal capacity”, such as those working in their household, for their personal benefit, rather than an organisation.
What action should HR teams take?
In light of these changes, HR teams should review sponsorship policies, as well as check terms of employment and any correspondence with sponsored staff. If need be, they should seek legal advice to ensure they are compliant with the latest guidance.
As well as recent increases in enforcement and penalties, the government is set to add further measures to the Employment Rights Bill passing through parliament to penalise sponsors who “repeatedly defy visa rules”.
More punitive measures will mean they will face lengthier bans from sponsoring migrant workers, so sponsor compliance is set to be more crucial than ever.
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