Our employer’s guide to obtaining a sponsor licence includes an overview of the points based immigration system and the steps involved in applying for a Skilled Worker or Temporary Worker sponsor licence to enable you to employ foreign nationals.
The information in this guide draws on the following government guidance. While we do our best to keep this guide updated, remember to always check the gov.uk website for the most recent guidance:
- Guidance on applying for a sponsor licence
- Guidance on becoming a licensed sponsor
- Guidance on becoming a temporary worker sponsor
An overview of the points based immigration system
On 1st December 2020 a points based immigration system came into force, replacing the previous immigration rules. Foreign nationals wishing to work in the UK must demonstrate they meet a specific set of requirements. For example, depending on their level of education, specific skills, ability to speak English or an offer of suitable employment etc, they will score points. Only those that have the necessary amount of points will be eligible for a visa.
Who does the immigration system apply to?
As a result of Brexit, free movement ended for EU nationals travelling to the UK. Therefore, employers will need a sponsor licence to employ most foreign migrants, including EU and Swiss nationals. This includes unpaid work, such as working for a charity.
However, employers will not need a sponsor licence to hire individuals who have an existing right to work in the UK, including:
- Irish citizens;
- EU citizens with settled or pre-settled status under the EU Settlement Scheme;
- Non EU citizens with indefinite leave to remain in the UK; and
- Individuals with a work visa that does not require sponsorship by an approved employer, ie Global Talent, Graduate, Youth Mobility etc.
The EU Settlement Scheme
The EU Settlement Scheme enables EU, EEA and Swiss citizens, and their family members, to apply for either pre-settled or settled status, depending on how long they have lived continuously in the UK. Pre-settled status means the individual can remain living and working in the UK for five years, while settled status means the individual can remain indefinitely. Employers do not require a sponsor licence to hire workers with settled or pre-settled status.
How to check immigration status
Employers are legally required to ensure their workers have the right to work in the UK. The right to work check can be completed online via Gov.uk – View a job applicant’s right to work details, or alternatively the employer can manually check that the worker has the required documentation.
The penalties for employing workers illegally are significant, and may include: loss of sponsor licence; an unlimited fine; possible imprisonment; an illegal working closure notice; or an illegal working compliance order. The penalties for employing workers illegally are significant, and may include: loss of sponsor licence; an unlimited fine; possible imprisonment; an illegal working closure notice; or an illegal working compliance order. Therefore, it’s crucial that you ensure your workers have the right to work in the UK.
Routes of entry available to foreign nationals
The new immigration system includes a number of different routes of entry for foreign nationals to work in the UK. Some routes do not require sponsorship by an approved employer. This means an employer is able to employ the foreign national without needing to apply for a sponsor licence. The non sponsored routes include:
- Global talent for highly skilled individuals and those with exceptional talent;
- Graduate international students may work for two years after completing their degree in the UK: and
- Youth mobility scheme each year up to 20,000 young people may come to the UK to work and travel.
For the purposes of this guide, we will focus on the immigration routes which require sponsorship by an approved employer. This means an employer needs to hold a sponsor licence to be able to employ the foreign national. The most common sponsored routes are the skilled worker and the temporary worker routes, which we will focus on more closely.
In addition, there are several Global Business Mobility routes which enable companies to set up a branch in the UK or transfer employees to a UK based office. There is further information on these routes on the gov.uk website: Sponsor a Global Business Mobility Worker
You can find out more about the different routes of entry on the gov.uk website: Becoming a licensed sponsor
Skilled worker route (replaced Tier 2 visa)
The skilled worker visa has replaced the Tier 2 visa. The skilled worker route is available to foreign nationals who have a suitable job offer from an approved employer, and meet the points threshold of 70 points. To be eligible, the individual must demonstrate that they have:
- A job offer from an approved employer with a sponsor licence (20 points);
- The job offer must be for a suitable role at the required skill level of RFQ3 / A Level or above (20 points); and
- The individual must have the ability to speak English to the required standard (10 points).
In addition, the individual must demonstrate one or more of the following:
- A job offer which meets the minimum salary threshold. While there are some exceptions, the threshold is typically the higher of £25,600 per annum or the “going rate” for the role (20 points);
- A job offer for a role which has been identified as having a national skills shortage (20 points);
- A relevant PHD (10 points) or a relevant PHD in science, technology, mathematics or engineering (20 points).
Employers are no longer required to meet the resident labour market test (ie that the vacancy has been advertised in the UK to give UK based workers a chance to apply first). However, employers do need to demonstrate that a genuine vacancy exists, and must keep evidence of the recruitment process.
Detailed information on the eligibility criteria is available on the gov.uk website, as well as a list of roles identified as having a national skills shortage. To assess the relevant skill level of a role, the government has published the Occupation Coding Tool.
Temporary Worker route
The Temporary Worker route enables employers to sponsor foreign nationals on a temporary basis. However, the licence is only available for specific types of employment. For example, the Seasonal Worker visa enables organisations to hire people in the horticulture sector, doing work such as fruit picking. The Seasonal Worker scheme is capped at 30,000 visas for 2022.
To apply for a Temporary Worker: Seasonal Worker sponsor licence, organisations must be endorsed by DEFRA as an approved scheme operator, and licenced by the Gangmasters and Labour Abuse Authority.
By introducing the points based immigration system, the government intended to ‘end the reliance on cheap, low-skilled labour coming into the country’. However, it soon became clear that some industries do need ‘low skilled’ workers. For this reason, the Seasonal Workers route was introduced to prevent national skills shortages. The scheme has recently been used to hire pork butchers, workers involved in poultry production and HGV drivers involved in food transport.
Further information on the Temporary Worker route is available on the gov.uk website.
Things you should consider before deciding to apply for a sponsor licence
Before applying for a sponsor licence, you consider the following:
Costs and timeframes
A fee applies for all applications for a sponsor licence. The charge varies depending on the size of the employer and the nature of the sponsor licence applied for. For example, the fee for large employers wishing to hire skilled workers is £1,476, while the fee for small employers and charities seeking to employ a temporary worker is £536.
In addition, an immigration skills charge applies for each foreign national hired by the employer. Again the charge varies, and depends upon the size of the employer and the duration of the employment. Large employers are charged £1,000 per migrant, per year. The charge is £364 for small employers and charities. The fee is payable when a certificate of sponsorship is assigned to an employee.
Organisations will be classed as a ‘small employer’ if at least two of the following apply:
- Annual turnover of £10.2 million or less;
- Total assets are worth £5.1 million or less; and
- No more than 50 employees.
Further information on fees is available on the gov.uk website.
In addition, applications take approximately eight weeks to be processed, and sometimes longer if a pre-licensing visit is required. Some employers may be eligible to apply for a priority service for an additional fee of £500 for a decision within 10 working days.
Does your organisation meet the eligibility criteria?
Any unspent criminal convictions for immigration offences or certain other crimes, such as fraud or money laundering, would prevent an organisation from being eligible to apply.
What is the immigration status of all existing employees, and do you have effective systems and processes?
An application for a sponsor licence will be declined if appropriate processes are not in place and/or there are breaches of immigration rules. It is important to conduct a review of all existing workers to confirm they have the legal right to work in the UK. Organisations must also ensure they have the right systems and processes in place in relation to immigration and recruitment.
Are foreign nationals needed to fill key roles?
You should carefully consider whether you will need to rely on hiring foreign nationals in future. Alternative options should be considered, for example:
- Adopting new recruitment tools and practices to attract different candidates, such as social media, open days, recruitment agencies and outsourced HR professionals;
- Introducing a graduate, apprenticeship or trainee management scheme;
- Upskilling or cross skilling existing staff;
- Outsourcing parts of the organisation; and
- Introducing technological changes, such as automating processes.
Applying for a sponsor licence can be a lengthy and costly process which should not be undertaken lightly if suitable alternative options are available.
How to apply for a Sponsor Licence
Once a decision is made to apply for a sponsor licence, the following steps need to be followed:
1. Prepare supporting documents
You must demonstrate that you are a genuine organisation operating lawfully in the UK. The documentation required will depend upon the nature of your organisation and the route of application. Most organisations must provide at least four documents, such as:
- the latest set of fully audited accounts;
- evidence of employers’ liability insurance cover of at least £5 million;
- evidence of registration with HM Revenue and Customs for PAYE and national insurance purposes;
- the current financial report or audited annual report;
- the certificate of VAT registration and latest VAT return; or
- proof of ownership or lease of the business premises.
The Home Office provides detailed instructions on the required documentation.
Any statutory declarations or affidavits need to be witnessed by a qualified person, such as a solicitor. The supporting documents need to be provided within five working days of the date of application. Therefore, it would be wise to prepare the information before completing the online form.
2. Assign key roles
You must nominate individuals to fill the following key roles:
Authorising officer
The authorising officer is a senior person who is responsible for ensuring that all relevant sponsor duties are met, and for deciding which staff will have access to the sponsorship management system.
Key contact
The key contact acts as the main point of contact with the Home Office.
Level 1 user
The Level 1 user is responsible for day to day activities using the sponsor management system. There must be enough Level 1 users to cover leave etc.
Depending on the size of the organisation, it may be appropriate to appoint one individual to fulfil more than one key role. Each individual will be assessed for their suitability including whether they are based in the UK, and any unspent criminal convictions or bankruptcy orders etc. Further information on the eligibility criteria for key roles is available on the gov.uk website.
3. Complete the online application
To apply for a sponsor licence, employers must complete an online application. The information required to complete the application will depend upon the type of sponsor licence applied for (skilled worker or temporary worker). All applicants will be asked to provide details of:
- The individuals assigned to key roles; and
- The number of certificates of sponsorship required and the reason for this number. If the application is approved, the employer will be granted a specific number of certificates of sponsorship for the financial year.
Furthermore, you will also need to provide detailed information on the nature of the organisation, such as:
- the size of the organisation;
- where it is located and operates;
- the type of organisation; and
- how long it has been trading.
Details may also be required of any individuals identified for sponsorship as skilled workers, ie: how they were selected; job title; organisational structure; occupation code; salary; duties; and skills, experience and qualifications required.
The Home Office has published guidance on the information required: Workers, Temporary Workers and Students: guidance for sponsors – Appendix A: supporting documents for sponsor licence applications
How will the sponsor licence application be assessed?
The Home Office will assess whether the organisation meets the eligibility criteria, and whether it has the right systems and processes in place to comply with its sponsorship duties.
The Home Office may visit the employer as part of the assessment. It’s likely that this visit will take place with limited prior warning. For this reason, it is really important that organisations have the correct systems and processes in place prior to application.
Successful applications
Where an application is successful, the employer will be granted a sponsor licence to hire foreign nationals. The sponsor licence will last for a specific period of time (typically four years), however the quota for certificates of sponsorship will need to be renewed on an annual basis.
Sponsors must assign an electronic certificate of sponsorship to all foreign workers (except those that have an existing right to work in the UK), which they can then include on their visa application.
Unsuccessful applications
In the event of an unsuccessful application, there is no general right of appeal. However, the employer may submit an ‘error correction request form’.
This applies where the employer believes that the caseworker has made a mistake or that the supporting documents have not been considered.
Where an application is refused, a cooling off period will apply. This will typically last for a period of 6-12 months depending upon the reason for the refusal. During this period, any further applications for a sponsor licence will be automatically rejected.
What are your responsibilities as a sponsor?
Sponsors (ie organisations who have been issued with a sponsor licence) must comply with the following obligations:
- check that their foreign workers have the skills, qualifications or professional accreditations needed to do their job;
- only assign certificates of sponsorship to workers when the job is suitable for sponsorship;
- inform the Home Office if sponsored workers are not complying with the conditions of their visa or if they stop coming to work; and
- report any significant changes in business circumstances, for example if they stop trading or become insolvent.
Sponsors must also have effective processes and systems in place to:
- monitor employees’ immigration status;
- keep copies of relevant documents for each employee, such as passport and right to work information;
- track and record employees’ attendance; and
- keep employee contact details up to date.
Moreover, temporary worker sponsors have additional responsibilities to ensure the welfare of their workers, such as:
- Maintaining a safe working environment;
- Providing an employment contract in the workers’ first language as well as in English;
- Meeting all legal obligations regarding pay, breaks, annual leave and health & safety; and
- Providing safe and hygienic accommodation.
It is important to note that sponsors may have their licence downgraded, suspended or withdrawn if they fail to comply with their obligations. So, you should familiarise yourself with the full list of obligations available on the gov.uk website.
What can we do to help?
If you would like advice on applying for a sponsor licence or employing foreign nationals, please contact our team on 0330 223 5253 or office@fitzgeraldhr.co.uk. We would be delighted to help you.
We hope you found this guide useful. You may also find the resources below helpful.
