Sponsor licence duties: a crackdown on compliance

As the new Labour government passes its first three months in power, it has become increasingly clear that the Home Office has intensified its efforts to ensure that businesses holding sponsor licences adhere strictly to compliance duties.

One of the key changes that Labour has made to UK immigration is to ensure greater compliance and accountability on sponsors to uphold immigration law and prevent abuse of the points based system. This has been evident in the number of sponsor licence revocations and suspensions in Q2 2024, which has included a 137% increase in revocations of skilled worker sponsor licences and a 70% increase in suspensions.

Ensuring compliance with sponsor duties is therefore crucial in order to maintain a sponsor licence and avoid penalties. This article outlines the key compliance duties that sponsor licence holders are required to follow.

Core duties of a sponsor

The Home Office's sponsor guidance makes it clear that holding a sponsor licence is a "privilege, not a right". Significant trust is placed in sponsors and the Home Office expects compliance with immigration law and wider UK law, and behaviour that is conducive to the wider public good.

There are certain core duties which every sponsor should adhere to and we have provided a summary of these below.

1. Reporting

Sponsor licence holders must report certain events to the Home Office within specific timeframes. This includes:

• Changes in employment: such as changes in job title, salary, or work location.
• Non-compliance: if a sponsored worker does not comply with the terms of their visa.
• Absences: reporting if a sponsored worker is absent from work for more than 10 consecutive days without permission.

2. Record-keeping

One of the primary responsibilities for sponsor licence holders is maintaining accurate and up-to-date records for each sponsored worker. This includes:

• Personal information: copies of passports, biometric residence permits (note – BRPs will be phased out at the end of this year and replaced with eVisas) and contact details
• Employment records: job descriptions, employment contracts, and salary details
• Right to work checks: evidence that sponsored workers have the right to work in the UK.

3. Monitoring and Reporting Changes

Sponsor licence holders must also report any significant changes to their business. This includes:

• Business structure: changes in company ownership, mergers, or acquisitions
• Location: changes in the business address or additional work locations
• Key personnel: changes in the key personnel responsible for managing the sponsor licence.

4. Cooperation with the Home Office

It is important for sponsor licence holders to cooperate with the Home Office and its officials. This includes:

• Site visits: allowing Home Office officials to conduct on-site visits and inspections
• Providing information: supplying any requested information or documents promptly.

Risks of sponsor non-compliance

The Home Office monitors sponsor compliance and will take action against those organisations who are reasonably suspected to be in breach of their duties. The Home Office may take the following actions (all of which can have serious consequences for a sponsor) where appropriate:

• Downgrading the licence
• Suspending the licence
• Revoking the licence
• Cancelling the permission of sponsored workers to remain in the UK
• Where it is suspected that a criminal or civil offence has taken place, this could be reported to the police or other relevant authorities.

The Home Office has ramped up the frequency and thoroughness of on-site inspections and audits, and compliance visits can often be unannounced. During inspections, officials may:

• Review documentation, including checking the records of sponsored workers, such as right to work checks and employment contracts
• Interview sponsored workers and key personnel to ensure compliance with immigration laws
• Inspect premises and ensure that the working conditions meet the required standards.

According to the latest Home Office data, in the second quarter of 2024, 1,023 employers had their sponsor licence suspended or revoked. This compares to 519 in the first quarter. Revocation of a sponsor licence can have dire consequences, including an organisation's inability to sponsor workers, which can have a significant impact on operations.

The Home Office's sharp rise in compliance action follows the increase in civil penalty fines in February this year, which rose from £15,000 to £45,000 for a first breach and from £20,000 to £60,000 for repeat violations. Companies also risk being "named and shamed" on a public register where illegal working has been identified. You can read our article on civil penalties here. 

The Home Office’s increased focus on compliance underscores the importance of adhering to sponsor licence duties. Businesses must stay vigilant and proactive in maintaining accurate records, reporting changes promptly, and ensuring that all sponsored roles are genuine. By doing so, they can avoid penalties and continue to benefit from the ability to employ skilled workers from around the world.

Womble Bond Dickinson has a dedicated team of specialist corporate immigration lawyers who can support and advise your organisation on its sponsor licence duties.