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1. We wish to recruit staff from outside the EU to meet skills gaps in our business. Do we need a sponsorship licence?

Yes.  If you wish to employ non-EU (migrant) skilled staff you will need to obtain a Tier 2 sponsorship licence. Applying for a sponsorship licence can take between one week to three months, depending on the complexity of the company’s structure and/or the documents that are sent to support the application.

In order to employ a migrant, the position may need to be advertised. This requirement is known as the Resident Labour Market Test (RLMT). It's necessary that the RLMT is carried out in accordance with the Home Office guidance to ensure that you are not, “denying or displacing a settled worker by filling the role with a migrant.” Carrying out the RLMT incorrectly can be frustrating as you will have to carry out the RLMT again, which will delay employing the migrant for at least 28 days. This is likely to have a detrimental economic effect on the business.

Each year the UK publishes a list of shortage occupations. Positions on this list do not need to be advertised before they can be offered to a migrant. However, regardless of whether a RLMT is required to be carried out or not you will need to apply for a Restricted Certificate of Sponsorship (RCoS) before the migrant can commence employment. 

Annually there are 20,700 RCoS’ available to Tier 2 (General) A rated sponsors. The Home Office varies the number of RCoS’ that they issue on a monthly basis. Applications must be submitted by the fifth of the month and a decision as to whether the RCoS has been granted will be given on 11th day of the same month (if the 11th falls on a weekend or a bank holiday the application will be decided on the next working day). As a general rule of thumb the higher the salary, the more likely a RCoS will be granted. 

Employees of multi-national organisations can be transferred to work in the UK on a long term basis, as long as you hold a Tier 2 (Intra Company Transfer) licence. For an employee to enter the UK under the Tier 2 (Intra Company Transfer) he/she must have been employed by the overseas organisation for at least 12 months unless he/she will be paid an annual salary of £73,900 or more.

2. How do we apply for a sponsorship licence?

If you wish to sponsor a migrant worker or overseas student to enter to work or study in the UK you must hold a sponsorship licence. There are different types of licences available;

  • Tier 2 applies to skilled employment
  • Tier 5 to temporary employment (in sporting and creative industries)
  • Tier 4 relates to students. Sponsorship is not available for unskilled workers.

You must meet the eligibility tests, provide the correct supporting documentation to support your application and pay the appropriate fee.  Applications are determined by the Home Office and usually take between one week to three months, depending on the complexity of the company’s structure and the documents that are supplied to support the application.  

3. How long does a sponsorship licence last for?

A sponsorship licence lasts for four years. However, during that time it can be downgraded or revoked if you fail to comply with your duties.

4. Do we have any on-going obligations once we have been granted a sponsorship licence?

Yes. You must comply with your sponsor duties at all times. Some of the duties can be easily overlooked, examples of which are provided below: 

You must report to the Home Office within 10 working days: 

4.1 If a migrant does not turn up for work on their first day

4.2 If you terminate a migrant’s contract earlier than the date set out in their certificate of sponsorship

4.3 If a migrant is absent for more than 10 working days without reasonable permission

4.4 If you stop sponsoring the migrant – this might happen if he/she moves to a non-sponsored immigration route

In addition, you have 20 working days to report the following to the Home Office:

4.5 Any significant changes to your business.  This might include a merger, take over or change in the nature of the business – including any TUPE transfer

4.6 If your business stops trading, goes into administration or becomes insolvent

4.7 If your business changes its name or address

4.8 Any changes to the structure of your business – including adding or closing down branches

4.9 Changes to the personnel of those named as key personnel responsible for administering the licence (this is often someone from the HR team).

If you fail to comply with the Home Office’s duties, your licence can be downgraded, suspended or even revoked.  

5. Our sponsorship licence has been downgraded – can we still employ migrants?

You can continue to employ your existing migrant staff, but you cannot employ new migrants until you upgrade your licence to an A-rated licence within less than three months. 

If you wish to upgrade your licence, you must agree an action plan with UK Visas and Immigration and pay the appropriate fee. If you fail to implement all of the steps set out, your licence will be revoked.

6. Our sponsorship licence has been revoked. Does that mean we have to immediately dismiss migrants?

No. If your licence is revoked the Home Office will write to all migrants you employ to advise them that their certificate of sponsorship has been revoked. They will have up to 60 days (or less if their visas are due to expire earlier) to find new employment with an employer holding a valid sponsorship licence. If they can’t find alternative employment they must leave the UK.

It is recommended that, if your sponsorship licence is revoked, you seek advice to make sure you adopt the correct procedures to ensure you are legally compliant from an immigration and employment perspective.

7. The Home Office have told us that they are going to conduct an audit. What does this mean and how can we prepare?

The Home Office can make announced and unannounced audits. Employers that score highly on its risk assessment matrix are more likely to receive an unannounced visit.

Compliance audits are robust, detailed and often last several hours. The compliance officers will expect absolute cooperation and disclosure of all relevant records. Your HR team and migrants are likely to be interviewed and will be tested to make sure that the business is operating within the terms of its licence.

The Home Office will be focusing on the following issues:

7.1 Reporting lines – the Home Office will usually ask to see Tier 2 migrants and the staff they report to and who are responsible for their day to day role  

7.2 Roles – Tier 2 migrants may ask to explain their role and responsibilities and this will be checked against the information provided in the Certificate of Sponsorship. If this information does not match or the migrant gives vague answers the Home Office may decide the business is acting in breach of its licence conditions

7.3 Recruitment and the resident labour market test – the Home Office may ask to see the CVs of unsuccessful candidates to ascertain why British or settled applicants were rejected.

To prepare, you should go through all necessary paperwork to ensure that you have made all relevant notifications to the Home Office and that migrant workers are working within the terms of their Certificate of Sponsorship. You will need to have the migrant’s identification documents and employment contracts to hand as well as evidence that you are keeping proper records and have adequate policies and procedures in place.  It can be helpful to retain evidence of the work undertaken by the migrant including appraisals, timesheets, emails of instruction etc. 

Human error is not an excuse, and if the Home Office find irregularities it can impose hefty fines, downgrade, suspend or revoke your licence. 

In 2017, civil penalties issued to employers amounted to £39.5 million, 605 Tier 2 sponsor licences were revoked and 705 sponsor licences were suspended. It is therefore important for you to prepare carefully and our specialist team of immigration lawyers can make sure that you are in the best possible shape.

Please contact Mandeep Khroud for a no obligation chat about how we can help you.

Published: May 2018


Employment Law Update - May 2018

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Mandeep Khroud