Employers who get sponsorship and visa costs wrong can face severe penalties. Vanessa Ganguin summarizes the latest guidance regarding the costs of sponsorship and visa that can be and cannot be passed on to a migrant worker.
The UK Government has made some significant changes to the guidance it provides employers who sponsor migrant workers.
Among them are ministers who have promised to stop employers from enslaving sponsored workers by accumulating debts resulting from their immigration fees.
The UK has the most expensive work immigration system in the world. A Royal Society study found that the upfront costs of immigration have increased 126% in the last year. The US is now our closest competitor for skilled workers.
The costs include the application for a sponsor license (upto PS 1,476), visa fees (upto PS 1,636), Immigration Skills Charges (upto PS 1,000 per year) and their Immigration Health Surcharges (upto PS 1,035).
Immigration practitioners can also advise on costs. We are often asked what charges a sponsor could ask a potential employee to pay, or which fees they should include in an agreement for clawback if the worker leaves their job soon after arriving with their work visa.
Combatting exploitation
Recent scandals have revealed that sponsors in the care sector are saddling their workers with high sponsorship costs and leaving them at risk of debts related to their work.
The latest changes to the sponsoring guidance were a result of this, and fulfilled a promise that immigration minister Seema malhotra made at the end last year.
She promised that “to combat this”, she would take action. “We are now taking actions to ensure that, if an business wishes to hire internationally, they will have to pay for sponsorship certificates, sponsor licenses, and the associated administrative costs themselves.”
This will stop the inhumane practice of recovering costs from employees, which has resulted in exploitation and unfairness of staff. Especially care workers who are left with debts to their employers.
Malhotra promised that first the changes would be applied to the Skilled Worker Route, and then to all other sponsored employment routes.
What are the costs of sponsorship?
The Immigration Skills Charge, which is paid every time a Certificate for Sponsorship is issued to staff with a visa for a skilled worker or senior or specialist worker, was the only cost that sponsors were forbidden from passing on to sponsored workers.
Sponsors who charge a migrant this amount risk losing their sponsorship licence. Sponsored employees would be unable to work for their employer, and their work visas would be curtailed.
Home Office guidance has now added that a sponsorship licence will be “normally” revoked when a sponsor attempts or tries to recoup any “associated administrative expenses (including premium services), and the Skilled Worker Sponsor licence fee”.
It is not surprising that the new guidance explicitly states that costs for a sponsor licence should not be recovered from the worker.
According to the guidance, “associated administrative expenses” include “premium service” fees. These are up to PS25,000 in fees for enhanced customer service and expedited UK Visas and Immigration applications. The guidance is not clear on whether “associated administration costs” include legal advice fees.
The new guidance warns sponsors that if they try to recover the costs of a certificate sponsorship fee for an Skilled Worker who is assigned after or on 31 December 2024, then “normally” their license will be revoked.
What costs can employers pass on to employees?
The sponsor guideline does not prohibit adding or passing on a clawback provision to an employment agreement to recover UKVI visa fees or other fees such as the Immigration Health Surcharge, or for legal advice regarding an employee’s right to enter the UK or stay there, or to extend their visa.
Employers should consult a lawyer before adding clawback clauses to their employment contracts or passing any costs on to migrant workers. They may also be in breach of their sponsor duty, and fall foul of contract or employment law.
Other Significant Changes
In order to be eligible for a sponsor licence, a sponsor must have at least one Level 1 User who is a UK resident or settled, as well as if they are an employee, director, or partner.
If a person is prohibited by law from acting as a company director, they cannot be the key personnel for a sponsor license unless a judge has granted them permission to act in this capacity or to promote a business or form one.
HR teams need to review their sponsorship policies and check employment terms, including any correspondence they have with sponsored staff.
The list of people who’s conduct could affect your ability to sponsor migrants has been updated to include a “person with significant controls” over a sponsor’s Companies House listing.
Sponsors are also prohibited from sponsoring migrants in a “personal capacity”, for example, those who work at their home, and not an organization.
What actions should HR teams take to improve their performance?
As a result of these changes, HR departments should review their sponsorship policies and check any correspondence they have with sponsored employees. They should, if necessary, seek legal advice in order to be compliant with all the latest guidelines.
The government will add more measures to the Employment Rights Bill that is currently being debated in parliament, to punish sponsors who “repeatedly violate visa rules”.
Sponsor compliance will be even more important than ever before, as they face longer bans on sponsoring migrant worker.
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