New Home Office sponsor guidance raises compliance bar for employers

Shara Pledger, an immigration expert with Pinsent Masons, was commenting after the Home Office issued new guidance for employers on how to sponsor employees under skilled worker status.

The guidance, which was published on 8 April, reinforces and expands on various duties for businesses that sponsor either permanent or temporary workers.

The guidance outlines a new framework for how salaries paid to sponsored workers will be calculated and accepted. The framework is structured to assess compliance depending on how frequently a worker is paid – whether monthly, weekly or on an irregular basis – to determine whether the required salary was paid within each rolling period.

A shortfall in one quarter, even if made up later, may constitute a breach. Where a worker's hours vary from week-to-week, sponsors are required to confirm the working pattern on the certificate of sponsorship or, if the pattern changes later, via a change of circumstances notification.

The guidance makes clear that penalties such as licence suspension or revocation may result if there are instances of a salary falling below what had been pledged in the certificate of sponsorship, particularly where underpayment leads to an equivalent hourly salary below the minimum accepted for sponsorship.

Pledger said the new guidance highlights that sponsors should treat their payroll records as being under ongoing scrutiny. “The guidance makes it clear that the Home Office will be actively and regularly checking salary compliance, not only through its own compliance visits, but directly through HMRC payroll data,” she said. “This means that salary shortfalls will not only be identified during a planned compliance audit – they may be picked up at any time through HMRC data-sharing.”

“The guidance very clearly stresses the importance of two things: maintaining clear and accurate payroll records and identifying and correcting any shortfalls as quickly as possible,” said Pledger. Where an error is identified, Pledger said the speed and thoroughness with which the employer responds – and the quality of the records evidencing both the error and the chosen resolution – will be “central to how the Home Office assesses the sponsor’s overall compliance posture”.

The Home Office guidance also reiterates that businesses are required to carry out a right to work check for every worker they sponsor, regardless of whether they are directly employed or engaged by the business, as well as for any other worker that they do directly employ or engage, regardless of whether those people are sponsored.

If an employer fails to carry out the required checks, its sponsor licence may be suspended while the Home Office investigates, or ultimately revoked altogether. This extends the current right to work responsibility for sponsors beyond that currently enshrined in law for employers.

These new updates follow recent changes that introduced a new duty for sponsors to inform workers about their UK employment and welfare rights, and Home Office amendments to the assessment of an eligible role for sponsorship, further codifying examples where sponsorship will not be deemed reasonable or genuine.    

Pledger said: “Sponsor compliance has been a hot topic now for a couple of years, with instances of Home Office investigation and revocation of licences continuing at an extremely high level. Changes to the sponsor guidance are common and are often introduced with minimal notice or fanfare, making it difficult for sponsors to remain up to date and to operate best practice.”

Following the guidance, Pledger says there are a number of practical steps employers can take including establishing a regular internal compliance check; checking hourly rate compliance for variable-hours workers; reviewing certificates of sponsorship records for irregular working patters; documenting permitted deductions carefully; and managing new start payroll timing proactively. Where errors do occur, it is advisable for employers to act quickly, document the changes and, where necessary, seek advice before making structural changes to pay.

“Even where changes do not introduce new practical steps for sponsors – perhaps because their processes were already in line with new requirements – understanding the potential outcomes in case of breaches of sponsor duties is extremely important,” added Pledger. “This will inform how best employers can respond to such events and minimise any potential for a compliance breach.”