The Rise of Sponsor Licence Revocations: How Employers Can Stay Compliant

The UK’s sponsorship system enables businesses to recruit skilled workers from around the globe. However, recent Home Office data highlights potential challenges for some employers holding sponsor licences. The number of sponsor licences being revoked or suspended has significantly risen, causing many businesses to reassess their compliance procedures.

In the second quarter of 2024, a total of 1,023 sponsorship licences were either suspended (524) or revoked (499). This is a huge increase compared to the same period in 2023, where just 117 licences were impacted. This sharp hike has raised the alarm among businesses that rely on foreign workers to fill skill gaps in sectors ranging from hospitality to technology and healthcare. The surge in sponsor licence enforcement signals that the Home Office is taking a harder stance on compliance, making it more important than ever for employers to fully understand their responsibilities under UK immigration law.

Why Are We Seeing a Spike in Revocations?

The increase in suspensions and revocations is part of the Home Office's continued effort to tighten enforcement and crack down on improper use of the sponsor licence system. The UK Visas and Immigration (UKVI) department has made it clear that ensuring compliance with immigration and employment regulations is a top priority. This enforcement push has been particularly noticeable in sectors like care, hospitality, and beauty, which have faced increased scrutiny due to concerns over visa mismanagement.

One contributing factor to the rise in sponsor licence issues is the growing number of businesses registering as sponsors. The number of organisations with sponsor licences has increased by 48% compared to the previous year. As more companies enter the system, the Home Office is likely to apply greater scrutiny, leading to a higher incidence of suspensions and revocations.

Some industries, such as the care sector, have been particularly affected by the crackdown. The care sector, in particular, has faced significant criticism due to reports of poor? compliance management, leading to increased inspections and penalties. However, it's important to note that all businesses, regardless of their sector, need to be vigilant and ensure they meet the standards set by the Home Office to avoid the risk of losing their sponsor licence.

The Impact of Losing a Sponsor Licence

For many businesses, particularly those in industries reliant on skilled foreign workers, losing a sponsor licence can have devastating consequences. Without a valid sponsor licence, a company cannot legally employ non-UK workers under the skilled worker visa scheme. This can lead to a loss of critical talent, delays in recruitment, and a negative impact on business operations. In industries such as healthcare, technology, and engineering, where there is already a shortage of skilled professionals, losing the ability to sponsor workers could significantly disrupt operations and growth prospects.

For example, if a company loses its sponsor licence and has to terminate an employee’s visa, the employee may have to leave the country, potentially causing significant disruption to projects, timelines, and client relationships. In some cases, businesses may also face legal challenges or financial penalties if found to be non-compliant with immigration laws.

How Employers Can Protect Their Sponsor Licence

The good news is that there are clear steps businesses can take to avoid losing their sponsor licence. Staying compliant with sponsor licence regulations is not only about following the immigration rules but also about ensuring that internal systems, processes, and records are in order.?

It’s a good idea to instruct an immigration firm that specialises in sponsor licence compliance to avoid any problems. Below are some key areas to focus on to reduce the risk of licence suspension or revocation:

1. Maintain Accurate and Up-to-Date Records

As a sponsor, one of the most important responsibilities is to keep accurate and up-to-date records for all sponsored employees. This includes personal details, employment status, and visa information. The Home Office are likely to request access to these records during inspections, so having them organised and easily accessible is critical.

Employers must ensure that they retain specific documents for each sponsored worker, as outlined in the sponsor guidance. The retention period for each document varies, but it’s essential that all required documents are kept for the stipulated timeframes.

2. Report Changes Promptly

The sponsor licence system requires businesses to report any significant changes that affect sponsored workers or the organisation. For instance, if a sponsored employee changes roles, is absent for an extended period, or leaves the company, this must be reported to the Home Office within specific time limits, usually within 10 to 20 working days. It is equally important to report any change in corporate structure eg merger, change of ownership and/or shareholding

Failure to report changes in a timely manner according to the standard reporting times can be considered a breach of sponsor duties and could lead revocation of the sponsor licence. It’s crucial to establish internal systems that flag any changes to employees' status, so they can be reported promptly.

3. Internal Compliance Audits

Home Office compliance officers regularly audit businesses with sponsor licences. These audits can be unannounced, so employers should be prepared at any time. Regular internal audits are a great way to identify any compliance gaps or areas that may need improvement.

Mock audits conducted by external specialists can also help businesses better understand what the Home Office will look for during an inspection and ensure that their systems, processes, and records are in full compliance. These audits should be carried out regularly, and the results should be used to update and improve internal procedures.

4. Ensure Right-to-Work Checks Are Compliant

While sponsor licences specifically apply to foreign workers, it’s essential to ensure that right-to-work checks are conducted for all employees, not just those on sponsored visas. UK law requires employers to check the right to work of all potential employees before hiring them, regardless of nationality.

It’s crucial to maintain thorough records of these checks and to follow the correct procedures. Ensuring right-to-work checks are consistently applied across the board will safeguard against the risk of employing individuals who do not have legal permission to work.

5. Keep Staff Trained and Informed

The rules and regulations governing the sponsorship system can change frequently. Employers should ensure that their HR team and anyone involved in recruiting or managing sponsored workers are fully trained and up to date with the latest guidance.

Regular training and updates will help ensure compliance with changing immigration laws and help prevent costly mistakes. It’s also worth noting that the Home Office expects businesses to be proactive in their approach to training and compliance.

Why It’s More Important Than Ever to Instruct an Immigration Specialist

As the UK government tightens its enforcement of sponsorship regulations, ensuring compliance has become increasingly complex. For employers, the risk of non-compliance is high, and the consequences of getting it wrong can be severe, ranging from licence suspension and revocation to financial penalties and operational disruptions. This makes it more critical than ever for businesses to seek the expertise of an immigration specialist.

Expert Knowledge of Changing Regulations

UK immigration law is subject to frequent updates and changes, and staying on top of these shifts can be tricky. From evolving sponsor duties to the introduction of new visa categories, the rules covering sponsor licences can be complex and hard to navigate without expert guidance. An immigration specialist keeps a close eye on all developments and can advise businesses on how to adapt their practices in response to any new or amended regulations.

For instance, recent changes to the right-to-work checks and the requirements for reporting employee absences have added extra layers of responsibility for sponsors. With so many details to manage, it’s easy for employers to miss something, especially if their focus is spread thin across other aspects of the business.?

Avoiding Costly Mistakes

Non-compliance, whether intentional or accidental, can result in the suspension or revocation of a sponsor licence, and the repercussions for businesses can be significant. Beyond the immediate impact of losing the ability to sponsor workers, there are longer-term effects, such as reputational damage, which can make it even harder to recruit talent.

Tailored Guidance for Your Business

Every business is unique, with different operational structures, workforces, and visa requirements. The Nathanson Partnership provides tailored advice that takes into account the specific needs and challenges of each business. Whether you’re a small business just starting to sponsor workers or a large corporation managing a wide range of sponsorship cases, an immigration expert will help ensure your compliance processes are aligned with your specific needs.

By taking a tailored approach, we can help businesses avoid unnecessary complications or burdens and ensure that they are operating as efficiently as possible within the sponsorship system. For example, they can assist in determining which visa route is most suitable for specific employees or advise on how to handle complex immigration situations.

Enhancing Your Reputation as a Sponsor

Businesses that demonstrate a strong commitment to compliance and ethical practices can benefit from a better reputation within their industry. Being able to show that you take your sponsor duties seriously to ensure the highest standards of compliance can strengthen your position as a trusted employer. This, in turn, can attract top talent from around the world who will be more confident in working for an employer that understands the importance of adhering to legal requirements.

About Tony

Tony is our UK Immigration Partner. With a diverse knowledge in a range of industry sectors including I.T, Legal Services, Engineering, Insurance as well as the Oil & Gas sectors, he has a wealth of experience in all aspects of immigration including corporate, education and high net worth and private individuals within his portfolio.