Following Brexit, many businesses in the UK are have been racing to obtain a Home Office (HO) approved Sponsor Licence (SL) enable them to hire talent from across the world to respond to the UK acute job shortage.
SL is the special permission or stamp of trust given by the HO to a UK business to enable them to employ non-UK workers. The scheme is part of the UK Points Based System and it is linked to the Skilled Worker Visa Route that migrant workers apply for when they have received a valid job offer from a UK business with a Sponsor Licence.
On 27 November 2008 when the old Work Permit route was abolished and replaced by the Sponsor Licence Scheme, many UK businesses applied for and rightly obtained their licences.
Well-established businesses got their Sponsor Licence on their first attempt and could rely on their licences to fill positions within their business, although within very limited parameters as the scheme was limited to managerial and shortage occupations.
Since January 2021 we have seen more businesses, even small start-ups, obtaining Sponsor Licences easily. As of 31 July 2022 there are over 60,000 businesses in the UK holding a Sponsor Licence of some kind.
Despite the welcoming approach of the Home Office to approving Sponsor Licence applications, there is still a strict Policy Guidance and criteria that businesses must meet in order to secure a licence.
Businesses have to show that they meet certain eligibility standards and are required to provide a set list of documentation and information in support of their applications in order to be successful.
The experience has shown that the Home Office decision makers and officials would not hesitate in approving a Sponsor Licence application to a newly formed business, as long as they are satisfied that this business understands the underlying compliance issues that come with holding a SL and the associated HR duties that must be carried out systematically and rigorously to maintain safe control over migrant workers’ activities.
Getting the Sponsor Licence application process correct the first time of asking is a deal breaker for many UK businesses aiming to hire talent from outside the UK and in an ever-competitive international labour market, it has been extremely daunting, complex, and costly to remain competitive for the desired talent.
The ability to sponsor migrants in the UK and the speed of a recruitment process that involves approval from the Home Office for the Sponsor Licence and the positions offered, affects the hiring process and can potentially spoil it if delayed for any reason.
Here are few tips and eight mistakes that UK businesses should avoid or watch out for when making an application for a Sponsor Licence.
- Genuine Story
The Home Office (HO) applies a genuineness test to all applications and it is important that businesses truly believe that they need a SL and are prepared to meet the obligations that come with it. They need to obtain sufficient information to determine whether they need a SL in the first place, what their story is, and why a SL is justified before starting an application.
This is not just about operating lawfully in the UK, it is about being able to offer genuine employment that will help the business grow and achieve its objectives.
It is about having sufficient funds or plans to sustain hiring a migrant, paying them a salary, and withstanding the associated fees for the sponsorship process.
It is about understanding whether the vacancy cannot easily be filled from the UK labour market and making sure the business is able to discharge its duties as a Licensed Sponsor that will have a strong say in who passes through the UK border and becomes British one day.
It is about the viability of the business and previous and current employees if any.
- Who runs the show?
It is imperative to determine from the outset who are the key people in the business who will have control over the Sponsor Licence and communicate with the Home Office and migrants during their running of the business.
The Home Office would like to know from the start who would be the following key personnel:
Authorising Officer: This is the nominee from the business that will apply for the Sponsor Licence and be responsible for the Sponsorship Management System and Compliance with the Home Office.
Key Contact: This can be the Authorising Officer, a member of staff from HR or Administration or even an outside legal representative who will be the contact person with the Home Office.
Level 1 User: This person will be assigning migrants with their certificates of sponsorship and reporting migrants’ activities to the Home Office for compliance reasons.
Level 2 User: This person will be assisting the Level 1 User with some activities within the Sponsor Licence Management System.
Needless to say there are certain eligibility criteria and conditions in for people selected to play these key roles.
For instance, the Authorising Officer and Level 1 Users should ideally be permanently residing in the UK and not to have any previous unspent criminal convictions. They should be paid staff unless exempt.
The Home Office usually carries out basic background checks on the key people listed in the Sponsor Licence application to ensure they are suitable.
It is recommended for businesses new to the Sponsor Licence scheme to appoint suitably qualified representatives for some of the key roles, such as the Key Contact and Level 1 user.
- Correct Documentation
The Home Office policy guidance lists mandatory documentation that needs to be provided with a SL application and these are key to getting the application approved at the first attempt.
It is noted that the documentation list varies significantly from one business to another depending on their trading activities, finances, business structures, industry, premises and years of trading.
Relying on outdated documentation can also be dangerous when making a SL application.
It is often forgotten that some legal documentation have an expiry date and failing to understand the validity of a document will lead it being excluded from the evidence provided in support of a SL application, which will eventually lead to the refusal a SL application.
- Employers Liability Insurance
Many businesses do not appreciate that holding valid Employer’s Liability Insurance is key to operating lawfully in the UK as an employer and it is a key document that will be requested by the Home Office as part of a Sponsor Licence application.
- Business Insurance
Some businesses are required to have business and/or professional indemnity insurance, depending on their sector of trading and the nature of their business’ impact on the public.
Doctors, lawyers, and accountants need to have the correct indemnity insurance in place. Likewise, insurers, bankers and investment consultants need to have similar professional insurance documentation in place to be able to lawfully operate.
- Compliance with Home Office Visits
Most applications refused are due to the lack of preparations before making the SL application.
The Home Office caseworkers are well trained at spotting poorly-prepared applications and these often trigger a refusal or pre-approval compliance visit to the business premises, in order to establish the legitimate nature of the business and fill in any gaps in the application and supporting documentation.
It is wise to get a preparation session booked with a competent legal representative to ensure the business are is trained on Home Office expectations and the standards required.
- HR compliance
Businesses applying for a Sponsor Licence need to understand the details of conducting HR activities and keeping certain mandatory documentation in place.
- Using a System
The Home Office would like to see that businesses have systems in place to record information, store compliance documentation and a calendar reminder system to alert them for key deadlines such as visa expiry dates, passport expiry dates, employees’ absences, and so on.
To summarise, businesses applying for a Sponsor Licence need to be well-prepared and leave nothing to chance.
During the course of over a decade we have been assisting hundreds of UK businesses obtain Sponsor Licences and worked with businesses of various sectors and sizes and helped them maintain their ongoing compliance from HR and Home Office Sponsor Licence perspectives.
Whether you are looking to obtain a Sponsor Licence or you have already obtained one and are looking for further education on compliance activities, contact us and our team can assist you making this successful.