Guidance for Sponsoring Workers

Brief Summary of Main Amendments

Limitations on Recovering Costs: Employers can no longer recover certain sponsorship charges, such as licence fees and Certificate of Sponsorship (CoS) fees, from sponsored workers.

Widened Definition of "You and Your": The definition of individuals who can be considered part of a sponsoring organization has been widened.

Changes to Main Personnel Rules: New rules have been introduced for eligibility requirements for key personnel involved in sponsor licence applications.

New Sponsorship Rules in a Personal Capacity: Sponsors can't utilize their licences to hire staff for private households, except in narrowly defined situations.

Minor Changes: There are some minor changes, with clarifications and updating including alterations to immigration status proof and vocabulary.

Detailed Breakdown of Changes

1. Limits on Reclaiming Costs

Employers used to have some discretion to recover sponsorship charges from employees, but there are now tighter restrictions. The new policy will avoid exploitation and financial distress for sponsored staff.

Main restrictions are:

Licence Fees and Administrative Charges: Employers are not allowed to recover sponsor licence charges or related administrative fees paid on or after 31 December 2024.

Certificate of Sponsorship Fees: Recovery of CoS fees by employers is prohibited for Skilled Workers designated on or after 31 December 2024.

Immigration Skills Charge: Already prohibited, the ban remains in force.

Employers must personally pay all sponsorship fees, particularly under the Skilled Worker route, to protect the rights of the employees.

2. Enhanced Definition of "You and Your"

The advice also expands the meaning of "you and your" to encompass those persons listed as Persons with Significant Control (PSC) on the Companies House record. PSCs are therefore now subject to sponsor compliance checks and obligations.

Consequences:

PSCs need to be checked for eligibility when employers apply for a sponsor licence.

Further compliance checks may be necessary to guarantee that PSCs are up to legal and regulatory standards.

3. Changes to Key Personnel Rules

Significant amendments have been made to the requirements for qualification of key personnel managing sponsor licences:

New Requirements: A minimum of one Level 1 user being an employee (or a partner/director) and a settled worker is to be appointed by sponsors if applications are made after 31 December 2024.

Clarifications: Key personnel should not be excluded from being directors and should not hold invalid National Insurance numbers, with the exception of where exemption is applicable.

Impact:

Foreign companies and start-ups will also be troubled if they lack qualified personnel who satisfy these requirements.

Organisations are advised to hire compliant personnel as Level 1 users to avoid future trouble.

4. Fresh Rules of Sponsorship in a Private Capacity

Sponsors cannot utilise licences in hiring employees in a private capacity, for example, hiring nannies or private household workers. Private servants at diplomatic homes are excluded.

Key Points:

Individuals and private households are not able to apply for sponsor licences.

Organisations must ensure that all sponsored employment supports their business operations.

5. Additional Minor Changes

There are additional changes as well:

Evidence of Immigration Status: New guidance takes into account the change from biometric residence permits to eVisas and short-term vignettes.

Terminology Clarified: Amendments to Certificate of Sponsorship categories and timelines provide clearer understanding of post-study sponsorship criteria.

Sponsor Licence Ratings: Explanations to the frequency and conditions of B-rated licences in action plans.

Important Takeaways for Employers

Employers must adapt these changes to comply with UK sponsorship rules. This includes:

Reviewing clawback agreements to avoid new restrictions from being violated.

Examining the eligibility of PSCs and principal individuals.

Checking sponsorship practices against updated rules.

Non-compliance can result in licence cancellations, penalties, and damage to reputation.