Home Office compliance visits: how can employers prepare?

Compliance visits to holders of Tier 2 sponsor licences are on the rise and employers must have their house in order – otherwise they could face having their licence revoked or downgraded. Vikki Wiberg of Taylor Wessing explains how they should prepare.

An unexpected email that will make any Tier 2 sponsor licence holder nervous: “In connection with your sponsor licence I would like to complete a compliance visit to your business premises… I will require access to your HR systems and staff files.”

The Home Office places significant trust on sponsors. With this trust comes a responsibility to act in accordance with the immigration rules and Tiers 2 and 5 guidance for sponsors. Essentially, the Home Office has outsourced part of its role to monitor immigration compliance to companies that choose to apply for a sponsor licence, retaining a duty to ensure that sponsors discharge their responsibilities.

The Home Office takes compliance action when it considers a sponsor has failed to do so or otherwise poses a risk to immigration control. The Home Office has the right to conduct announced or unannounced visits to any address where sponsored Tier 2 migrants are working.

The number of audit visits continues to increase. During a visit auditors check whether a sponsor is meeting their obligations, has the necessary systems and procedures in place to do so, is sending accurate information to the Home Office, and is complying with duties to prevent illegal working. They review files, interview sponsored staff and key personnel (the people nominated on your licence), and inspect policies.

Audit visits

The chances of receiving a visit, although increasing, remain low for most sponsors. In Q3 and Q4 of 2017, 14% of licence applicants received a pre-licence visit and 8% of Tier 2 sponsors were visited after the licence had been issued.

Of those receiving a post-licence visit during this period, 71% resulted in suspension or revocation of their licence.

Many visits are scheduled following intelligence from HMRC of illegal working. A red flag may be raised if they are paying tax but have not evidenced a valid visa or are working more hours than permitted (a risk for those employing Tier 4 students). If you receive a civil penalty or enquiry from the Home Office illegal working team you are more likely to receive a follow-up audit.

Visitors will review at least 10% of sponsored migrant files, 40% of right-to-work-check documents and interview at least three sponsored migrants, but often review more files; a significant time and preparation outlay.

Downgrading licences

If the visit does not go well your sponsor licence may be downgraded to a B-rating or revoked. A B-rating requires a three-month action plan at a cost of £1,476. During this period you are not allowed to sponsor new staff or make changes to your licence. You are then subject to a second visit to check compliance with the plan.

If your licence is revoked, whether straightaway or following the action plan, employees who hold Tier 2 visas will have their visas curtailed and normally have 60 days to find another sponsor or they, and any dependant family members in the UK, will need to leave the UK and are often subject to a 12-month cooling off period during which they cannot return. Only by meeting the auditor’s concerns can your licence be reinstated.

The outcome of a visit can be serious and you will wish to avoid this. What should you do if you receive this seemingly innocuous email?

Many visits are scheduled following intelligence from HMRC of illegal working. A red flag may be raised if they are paying tax but have not evidenced a valid visa or are working more hours than permitted.”

1. Request to postpone the meeting – if the visit is announced the visitor normally allows you to postpone it until a more convenient time, buying you valuable days to ensure your systems and personnel are ready. A postponement of one to two weeks is the maximum permitted.

2. Review your files – your level one user (who is responsible for the day-to-day management of the licence) and HR team should regularly review sponsored workers’ files to ensure they comply with Appendix D record keeping requirements, information is up-to-date, and changes in personal circumstances have been reported as required. A pattern of late or non-reporting can lead to your licence being revoked as it suggests you are not aware of your sponsor duties. If you find any discrepancies take advice as to how to address them. Late reporting is better than no reporting.

3. Arrange a mock audit – it is helpful to instruct an adviser to come to your offices before the audit to review files and ensure they are compliant with the sponsor guidance. Advisers can spot potential issues, ensure notifications are made, and conduct a mock interview with your key personnel in preparation for the visit.

4. Review your right to work documentation – all employees, regardless of nationality, must have their right to work documentation checked, copied and retained before starting work. This consists of checking original passports and any visa documentation if applicable. Copies must be signed and dated and include prescribed wording. This process is important because, if done properly, it can provide a defence against findings of illegal working (attracting £20,000 fines or imprisonment). If you find gaps in documentation you should consider taking fresh right to work copies to sit alongside the originals and reviewing your onboarding processes.

5. Prepare your key personnel and sponsored staff – the auditor will interview your authorising officer to check they understand the licence and duties. They verify that roles filled by sponsored staff are suitably skilled, any advertising carried out is genuine and meets the strict Home Office rules, and staff are paid in accordance with visas. General legal compliance and understanding of employment law will also be covered. Your authorising officer may not be up-to-date with all Home Office rules and they will need to take time to review the guidance. The role that lawyers can play is limited – time must be taken to prepare your authorising officer and staff.

An audit visit can be time-consuming and stressful and the potential outcome of not preparing fully can cause real business issues. Sponsors should ensure their files remain up-to-date at all times and take licence compliance seriously.

Vikki Wiberg

About Vikki Wiberg

Vikki Wiberg is senior counsel in law firm Taylor Wessing's mobility team.
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