A sponsor licence allows businesses to hire skilled overseas workers, but maintaining sponsor licence compliance is crucial to avoid penalties. Sponsor duties include adhering to sponsorship duties set by the Home Office, ensuring compliance with UK sponsor compliance requirements, and being prepared for Home Office compliance visits. Failure to follow sponsor compliance guidance may lead to a sponsor licence compliance audit, fines, or even a sponsor licence revoked status. This guide explains how to meet sponsor license duties, avoid Home Office sponsor compliance issues, and prepare for a sponsor licence compliance visit.
Key Sponsorship Duties
Businesses with a sponsor licence must fulfill strict sponsor duties and compliance obligations. These duties are split into three main categories:
- Reporting Duties
- Record-Keeping Duties
- Home Office Compliance with Immigration Laws
Failure to meet sponsor license compliance standards can lead to a sponsor licence suspended status, financial penalties, or being added to the revoked sponsor licence list.
Reporting Duties
A key part of UKVI compliance guidance is meeting sponsor reporting duties. You must report changes via the Sponsorship Management System (SMS) to maintain sponsor licence compliance. This includes:
1. Reporting Changes
One of the primary responsibilities of a sponsor is to report any changes related to both your organisation and the sponsored workers. Depending on the nature of the changes or events, you have between 10-20 working days to report them and you can do so in the Sponsorship Management System (SMS).
The deadline for reporting changes is also affected by the size of your company: if you’re considered a small business or charity and the number of your employees exceeds 50, you must report the change to the Home Office within 10 working days if at least 2 of the 3 points below exceed the numbers mentioned (read below).
You’re considered a small business if you satisfy two or more of the following requirements:
- Total turnover per fiscal year – not more than £10.2 million net;
- Total net asset per given fiscal year – not more than £5.1 million net
- Total number of employees – not more than 50
You’re considered a charity if you’re:
- A registered charity in England, Wales or Scotland
- A registered charity in Northern Ireland—if you’re not on the register, you must provide proof of your charitable status for tax purposes from HMRC
- An excepted charity
- An exempt charity
- An ecclesiastical corporation established for charitable purposes
2. Record-Keeping Duties
Record-keeping is a vital part of your compliance responsibilities as a sponsor. The Home Office may conduct audits, either scheduled or unannounced, to ensure your business is adhering to its duties. Failure to maintain proper records can lead to severe penalties, including the loss of your sponsor licence.
- Required Records
You must keep certain records for every sponsored worker you employ. These include:
- Right to Work Checks: you are required to retain copies of documents that verify your employees’ right to work in the UK. This includes passports, Biometric Residence Permits (BRPs), a stamped entry clearance visa (if applicable), and an online right to work check proof.
- Employee Contact Information: you must maintain up-to-date records of the residential addresses, phone numbers, and email addresses for each sponsored employee to ensure sponsor licence compliance.
- Job and Salary Information: this includes records of job descriptions, employment contracts, pay rates, and other job-related documentation to verify that the role meets the requirements specified in the Certificate of Sponsorship (CoS).
- Attendance and Absence Logs: keep a record of attendance, including any absences (especially unauthorised ones), to ensure compliance with Home Office regulations.
- Evidence of Skills and Qualifications: maintain records proving that the employee has the necessary skills, qualifications, or certifications to perform the job they are being sponsored for. This may include diplomas, certificates, or professional licences.
- Proof of Changes in the Nature of Your Business: a company needs to keep all documentation on file if anything changes within the organisation.
- Details about Dependent Residents of Sponsored Workers: this includes keeping records of dependent family members (such as spouses and children) who reside in the UK under dependent visas tied to your sponsored employee. You should maintain up-to-date information on their residential status, contact details, and visa expiry dates to ensure they remain compliant with immigration laws. It’s important to record any changes in the family structure, such as a spouse or child leaving the UK, or visa renewals. Additionally, if a sponsored employee’s dependents apply for separate residency or right-to-work status, you must document these updates as part of your compliance records.
- Document Retention Period
According to UK Home Office guidelines, these documents must be kept for the duration of the sponsorship and, in some cases, for longer periods to comply with other legal obligations such as those related to preventing illegal working.
3. Home Office Compliance with UK Immigration Laws
As a sponsor, you must ensure that all sponsored roles meet the requirements set by UK immigration laws.
- Genuine Vacancy Rule
One of the most critical regulations is the genuine vacancy rule. When sponsoring a worker, the position must represent a legitimate need within your business, and the job duties must align with those specified in the CoS. The Home Office can investigate to ensure that a job is not being exaggerated or created solely to enable an overseas national to work in the UK.
- Right to Work Checks (RTW)
Employers must demonstrate compliance with UKVI right to work laws by conducting proper right to work check employer procedures. You must perform right to work checks before any employee starts working for your organisation. For sponsored employees, ongoing checks may be required, particularly as their visa expiry dates approach.
- Initial Right to Work Check: before employment, you must verify that each sponsored worker is legally allowed to work in the UK. This includes checking their passports, visas, and BRPs.
- Ongoing Monitoring: for non-settled employees (those who hold a Spouse, Student, Global Talent, and other type visa that allows them to work legally in the UK). Their immigration status doesn’t depend on their employer, but you must track visa expiry dates and ensure timely renewals. Failure to do so could result in fines or legal action. More on compliance duties for sponsored employees and non-settled workers below.
For the main sponsor, you are required to do the online check RTW UK when the employee starts working for you, using the share code check tool. If the employer has a Skilled Worker visa employee (but they are not sponsoring them), they need to do RTW checks every 6 months. For Student visa holders, right to work checks are performed every 6 months as well. For the rest of non-settled employees, RTW checks are needed when they start their job.
- ATAS Certification for Certain Roles
For certain research or technical roles, employees may require an Academic Technology Approval Scheme (ATAS) certificate . You must ensure that the employee applies for this certification and that it is approved before they can start work. The ATAS requirement typically applies to roles in science, engineering, and technology sectors.
Handling Mergers, Takeovers, and Insolvency
If your business undergoes a significant organisational change – such as a merger, acquisition, or insolvency – you must follow specific procedures to remain compliant with your sponsorship duties.
Mergers and Takeovers
If your business is involved in a merger or acquisition, you must report this change to the Home Office within 20 working days. During this process, it’s essential to consider how the transfer of sponsorship responsibilities will be handled:
- Complete Takeovers: in cases where another company completely takes over your business, and the sponsored workers move to the new entity, the new employer must assume responsibility for the employees and apply for a new sponsor licence if they do not already hold one.
- Partial Takeovers: in this case, where only part of the business is acquired, it’s essential to ensure the correct transfer of sponsored workers. You must provide details of which employees will transfer to the new employer and which will remain.
Insolvency Procedures
If your company enters administration or another form of insolvency, specific actions are required to maintain compliance:
- You must notify the Home Office within 20 working days of entering administration or administrative receivership.
- If your business is being liquidated, your sponsor licence will be revoked, and any sponsored employees will need to find alternative sponsorship or leave the UK.
Sponsored Employees vs Non-Settled Workers
Sponsors must be aware of the different compliance duties for sponsored employees and non-settled workers.
- Non-settled employee: a person who holds any of the following types of UK visas – Spouse, Student, Global Talent, Ancestry, PBS Dependant, Start-up – or a EU pre-settled scheme status that allows them to legally work in the UK. Their immigration status doesn’t depend on their employer.
- Sponsored employee: a worker who is directly sponsored by the employer via the Skilled or Temporary Worker visa route. Their right to work in the UK is entirely dependent on the employer sponsoring their visa.
Since non-settled employees are not directly sponsored by the company, the employer doesn't have to report any changes in these employees' circumstances (such as changes in salary, working hours, role or duties, promotions) to the Home Office via the SMS (Sponsorship Management System).
For non-settled workers, you only need to:
- Check their right to work
- Keep records of the visa expiration date, it will be illegal to employ them beyond that date unless their visa is extended
- Conduct follow-up checks close to the visa expiry date
Navigating Compliance Audits
The Home Office may conduct compliance audits at any time to ensure that you are fulfilling your duties as a sponsor. These checks may be unannounced and can involve both on-site visits and remote evaluations of your records and processes.
Here’s how to prepare and what to expect:
Document Readiness
Ensure all records required for compliance, including right-to-work checks, employee attendance, and salary information, are organised and readily accessible. In the official guide (Appendix D) the Home Office outlines the specific documents that should be available during an audit. The Home Office has the right to request these records at any time.
On licence renewal: starting from April 2024, sponsors with licence expiring on or after 6 April 2024 no longer need to apply for renewal. The Home Office will automatically assess eligibility and continue the licence for compliant sponsors.
Physical Inspections
If an on-site audit is conducted, expect inspectors to verify the accuracy of the documents you have submitted through the SMS. They may also interview key personnel responsible for compliance (e.g., the Authorising Officer or Level 1 User) as well as sponsored workers to ensure their job roles align with the details provided in their CoS.
Potential Outcomes
After an audit, you may receive feedback or be issued a corrective action plan if any areas of non-compliance are found. In more serious cases, you could face penalties, licence suspension, or revocation.
Failure to meet your sponsorship duties can result in various sanctions, including:
- Licence Downgrades: if you fail to comply with reporting or record-keeping duties, your sponsor licence may be downgraded from an A-rating to a B-rating. To restore your A-rating, you will need to follow a sponsorship action plan set by the Home Office.
- Licence Suspension or Revocation: serious breaches of compliance, such as employing individuals without the right to work, can lead to the suspension or revocation of your sponsor licence. This would prevent you from hiring international workers and could jeopardise the employment status of your current sponsored employees.
Being "audit-ready" at all times ensures you avoid disruptions to your business operations and can continue sponsoring international workers.
How Nation.better Can Ensure Your Sponsorship Compliance
Maintaining compliance with UK sponsorship duties is a critical yet complex task for businesses employing international talent. The consequences of failing to meet these responsibilities can be severe, from penalties to the loss of your sponsor licence.
With Nation.better’s sponsorship compliance services, our team of immigration specialists ensures you meet all your obligations seamlessly. From record-keeping to audits, we handle the details, so you can focus on growing your business.
If you need support with compliance, fill out this form , and our team will provide a tailored solution on how we can help safeguard your sponsorship status.