The Impact of Brexit on UK Sponsor Licence Applications and Compliance Obligations: Key Changes and Responsibilities

Since the UK’s departure from the European Union, significant changes have been observed in the realm of immigration, impacting how businesses manage their recruitment processes. Brexit has instigated a profound shift in the UK sponsor licence applications, presenting a new set of compliance obligations for organizations aiming to employ non-UK residents. The cessation of free movement between the UK and the European Economic Area (EEA) necessitates that UK employers seeking to hire EEA nationals secure a valid sponsor licence.

The new post-Brexit immigration system underscores the importance of understanding the updated compliance framework and sponsor obligations to maintain a sponsor licence. The application procedure for sponsor licences has become more crucial than ever, with the Home Office playing a pivotal role in overseeing compliance visits. Employers not only need to navigate the complexities of visa sponsorship and management of Certificates of Sponsorship but also align their Human Resources practices with the new system to avoid potential legal challenges.

Key Takeaways

• Brexit has necessitated a revision in UK sponsor licence applications and compliance processes.
• Understanding and adhering to the updated compliance framework is critical for maintaining a sponsor licence.
• Employers must navigate visa sponsorship complexities in alignment with the UK’s new post-Brexit immigration rules.

Overview of UK Sponsor Licence System Post-Brexit

The UK’s exit from the European Union has precipitated significant adjustments to the immigration system, directly impacting how UK employers manage and recruit non-UK nationals. Core to these changes is the sponsor licence—a pivotal element for legal employment of overseas labour post-Brexit.

Changes to Immigration System

Post-Brexit, the immigration system in the UK has transitioned to a points-based system (PBS). The PBS is designed to assess potential immigrants on a range of criteria before they are granted permission to work. This includes English language proficiency, having a job offer from an approved sponsor, and meeting a certain salary threshold. The end of free movement for EU citizens means that the same immigration rules apply to almost all non-UK nationals wishing to work in the country.

Within this system, the processing times for sponsor licence applications can sometimes extend up to eight weeks. Employers are advised to plan accordingly, as any non-compliance risks the imposition of penalties or revocation of the licence.

Sponsor Licence Necessity for UK Employers

With the cessation of free movement, a significantly higher number of employers must now obtain a sponsor licence to hire workers from the EU, as well as from other parts of the world. Employers need to prove an authentic need for skilled workers from outside the UK and that these positions cannot be filled by the resident labour market. Additionally, they must adhere to specific obligations and wage thresholds to ensure compliance with the immigration rules.

Maintaining a sponsor licence also requires robust and diligent human resources practices to monitor employees’ compliance with visa regulations. Employers will be scrutinised for their HR processes, particularly in their ability to manage sponsored workers and carry out the mandatory right to work checks. Failure to comply with these stringent requirements can result in severe repercussions, including licence suspension or revocation.

Compliance Framework and Sponsor Obligations

The UK’s points-based immigration system imposes stringent compliance obligations on organisations that hold or wish to obtain a sponsor licence. Maintaining compliance is crucial to avoid sanctions, including licence suspension or revocation, and ensures the ability to continue employing overseas workers lawfully.

Understanding Compliance Checks

Compliance checks are a critical part of the UK’s sponsorship system. They are conducted by the Home Office to ensure that sponsors fulfil their responsibilities under the immigration rules. During these checks, sponsors must demonstrate that they have robust systems in place to monitor sponsored employees. This includes ensuring that their employees have the appropriate permissions to reside and work in the UK, and that they are engaged in the job for which they were sponsored. Organisations are expected to have a clear understanding of the compliance process and to fully cooperate with the Home Office’s enquiries.

Reporting and Record-Keeping Requirements

Sponsor licence holders are required to meet specific reporting and record-keeping requirements as part of their compliance duties. They must report certain changes to employee circumstances, such as a change in job role or a premature end to employment, typically within 10 working days. In addition, sponsors must keep detailed records of sponsored employees, including personal information, right to work documents, and attendance records. Regular audits should be conducted to ensure that all records are up to date and accurately maintained. Failing to comply with these obligations can lead to severe consequences, including revocation of the sponsor licence.

Application Procedure for Sponsor Licences

When applying for a sponsor licence in the UK, organisations must carefully prepare their submission to include the correct documentation and be aware of the processing times. Understanding these elements is crucial for a successful application.

Required Documentation

An organisation seeking to secure a sponsor licence must provide a range of documentation as part of their application. They must demonstrate their ability to fulfil sponsorship duties and evidence their legitimacy as an employer. This includes, but is not limited to:

• Proof of the business’s legal status (e.g., Companies House registration)
• Evidence of the business operating and trading in the UK (e.g., bank statements, VAT registration number)
• An organisational chart detailing the roles and responsibilities of current employees
• Relevant job descriptions for which the organisation intends to sponsor individuals
• Any registration or accreditation necessary to operate in the industry

Applicants must ensure that the information is current and accurate to facilitate the approval process.

Processing Times and Priority Service

The standard processing times for sponsor licence applications can vary. Typically, the Home Office aims to process applications within 8 weeks from the date the application is received. However, situations such as incomplete applications or the necessity for additional scrutiny can extend these timescales.

Organisations that require faster processing can opt for the Priority Service, which promises a faster decision, usually within 10 working days. However, this service incurs an additional fee and is subject to availability. It is recommended for businesses to consider their need for expedited processing when planning their sponsorship strategy.

The Role of the Home Office and Compliance Visits

In the United Kingdom, the Home Office plays a crucial role in maintaining the integrity of the immigration system, particularly in the context of businesses and institutions that wish to employ individuals from outside the UK. They conduct sponsor compliance visits as a part of their duty to ensure adherence to immigration rules.

Inspection Process

During sponsor compliance visits, Home Office officials undertake a thorough inspection to ensure that sponsors are meeting their obligations under the points-based system. The process typically involves reviewing the organisation’s HR systems to ascertain that proper record-keeping is in place and scrutinising the recruitment practices to confirm that they align with the licence terms. Sponsors can anticipate assessments on their preparedness prior to the issuance of a licence as well as post-licence inspections.

Key aspects assessed include:

• Record-keeping: Verification of accurate and up-to-date documentation for sponsored employees.
• Reporting: Confirmation that sponsor reporting duties are fulfilled promptly regarding changes in employee circumstances.
• General compliance: Ensuring that the terms of the sponsor licence are being upheld in full.

Civil Penalties for Non-Compliance

The Home Office enforces stringent penalties on organisations that fail to comply with immigration laws and sponsor obligations. Civil penalties may range from fines to licence suspension or revocation, significantly impacting the organisation’s ability to employ international talent. Additionally, instances of severe non-compliance or repeated offences could lead to prosecution. It is essential for sponsors to adhere strictly to the regulations outlined by the Home Office to avoid these repercussions.

Visa Sponsorship and Management of Certificates of Sponsorship

Visa sponsorship is a critical process that allows UK organisations to employ non-UK individuals in various sectors. Effective management of Certificates of Sponsorship (CoS) is integral for compliance with the UK immigration rules post-Brexit.

Assigning Certificates to Skilled Workers

Employers intending to hire skilled workers from outside the UK must first obtain a sponsor licence and then assign a CoS to each prospective employee. A CoS is an electronic document with a unique reference number that holds information about the job and the individual’s details. It serves as proof that the organisation is willing to sponsor the worker and that the role fits the criteria set by the UK Visa and Immigration services.

The process of assigning certificates has gained complexity since Brexit, with an increase in applications for sponsor licences. Employers must demonstrate that roles meet the required skill level and that appropriate wages are offered to comply with the Skilled Worker route guidelines.

Checklist for CoS Assignment:

• Verify the role is eligible and at the required skill level.
• Ensure salary meets the Skilled Worker route criteria.
• Allocate the CoS via the Sponsor Management System (SMS).
• Record the worker’s information accurately on the CoS.

Sponsored Routes for Sport and Creative Industries

Specific guidelines apply to sponsorship within the sports and creative industries. Sporting bodies and organisers may sponsor athletes, coaches, and support staff under the Sportsperson visa route, which requires endorsement from the relevant sport’s governing body.

In the creative sector, organisations can sponsor individuals for roles that are critical to the production and cannot be filled by the resident labour market. This route includes but is not limited to actors, dancers, musicians, and film crew members. The sponsored individual must be internationally recognised at the highest level or demonstrate exceptional promise.

Key Points for Sponsorship in Sport and Creative Industries:

• Obtain a Sport Governing Body Endorsement for athlete and coaching staff visas.
• Assess the creative worker’s eligibility based on their international recognition.
• Assign a CoS and provide evidence of the role’s necessity for production.

In both cases, the sponsor must ensure the role cannot be filled by someone already present in the UK, and they must satisfy other immigration rules pertinent to the individual’s occupation. It’s essential to adhere to these specific requirements to maintain the integrity of the visa sponsorship system and uphold the compliance obligations.

Impact of Brexit on Human Resources Practices

Brexit has significantly altered the landscape of Human Resources within the UK, especially in terms of employment verification and compliance with new immigration systems.

Right to Work Checks

Post-Brexit, the right to work checks have become a pivotal part of HR duties, as employers must verify that their employees have the appropriate status to work in the UK. This includes checking and retaining copies of passports, visas, and biometric residence permits. Employers now need to be particularly vigilant to comply with the new immigration regulations and avoid unlawful discrimination.

HR Processes and the Sponsorship Management System

With Brexit’s implementation, HR processes have been intricately linked with the Sponsorship Management System (SMS). Companies now need a sponsor licence to hire most workers from outside the UK, which requires a stringent application process. HR departments must meticulously track and record employee information within the SMS and report any changes in employee circumstances to ensure ongoing compliance with UK immigration laws. This system has become a crucial tool for HR in managing sponsorship duties and protecting businesses from potential legal issues.

Addressing Delays and Uncertainties in Visa Processing

In the post-Brexit landscape, sponsor licence applicants encounter a more complex visa processing environment. It’s imperative to understand the steps to minimise application delays and the importance of contingency planning.

Minimising Application Delays

Sponsor licence and visa applicants can take specific actions to reduce the likelihood of delays. It is critical to provide comprehensive and accurate documentation as requested by UK Visas and Immigration. Organisations are advised to meticulously detail their HR processes used to track and check employees, including right to work checks. The standard processing time for a sponsor licence is eight weeks following submission, though this period can be longer if the Home Office seeks to obtain further compliance information.

Applicants should also regularly check for updates to the UK immigration rules, as changes can occur without notice. Staying informed allows for prompt submission of applications based on the current guidelines.

Contingency Planning

Proactive planning is essential for businesses awaiting licence approval to address unexpected delays in visa processing. An organisation must be prepared by identifying alternate strategies to manage non-settled workers they are looking to sponsor during prolonged processing times. This includes ensuring all pre-licence application steps, such as determining the type of worker required and establishing internal sponsor management roles, are completed correctly.

It’s beneficial to prepare for related actions while the licence application is under review, such as assessing the financial ability of the applicants to support themselves without depending on public funds, reflecting the necessity stated in the visa application process.

By considering these factors and implementing strategies ahead of time, businesses can navigate the uncertainty and mitigate the risks associated with sponsorship delays.

Legal Considerations and Compliance with UK Employment Law

The UK’s departure from the European Union has resulted in substantial amendments to immigration rules and employment regulations. In navigating these changes, businesses must remain diligent to ensure compliance and uphold their responsibilities under UK employment law.

Adhering to Changes in Immigration Rules

With Brexit, UK companies sponsoring non-UK nationals have had to adapt to a new points-based immigration system. Sponsor Licence applications have become crucial for businesses employing from outside the UK. Employers must demonstrate that they meet specific eligibility requirements and can offer genuine employment meeting the appropriate skill and salary level. The Skilled Worker visa replaces the former Tier 2 visa category, necessitating employers to be compliant with the new system’s demands.

Compliance obligations extend to regular reporting duties and record-keeping to the Home Office. These stringent measures include, but are not limited to:

• Ensuring their foreign employees have the necessary approval to work in the UK.
• Reporting any significant changes in sponsored employees’ circumstances.
• Conducting right to work checks accurately and storing evidence thereof.

Maintaining Accurate Employment Records

The accuracy and maintenance of employment records have always been a critical aspect of compliance. Post-Brexit, employers must be vigilant in keeping detailed and up-to-date records for all employees, including:

• Personal details and identification documents.
• Documentation of employment terms, such as contracts and changes thereof.
• Records of absences, both authorised and unauthorised.

Employers should routinely audit their records to ensure ongoing compliance with UK employment law. They must keep abreast of current legislation to prevent breaches that could result in severe penalties or revocation of the Sponsor Licence. Regular training on immigration rules and employment standards can help maintain a compliant workforce.

Recruitment Challenges and Opportunities

The post-Brexit landscape has significantly altered the approach to recruitment for UK businesses, necessitating adaptations to attract a diverse talent pool while meeting new skilled worker regulations.

Building a Diverse Talent Pool

Brexit has introduced complexities in accessing talent, especially from EU nationals who previously moved freely to the UK. Recruitment companies now face the challenge of sourcing talent that can satisfy the Home Office requirements. The loss of unrestricted access to the European labour market means that UK firms must now look elsewhere to maintain a robust and diverse talent pool. This has led to organisations reassessing their strategies and often expanding their search to a global stage to secure the necessary skills.

Adapting to the Skilled Worker Requirement

The introduction of the Skilled Worker visa has imposed stringent criteria that employers must navigate. To sponsor an individual, businesses must evidence a genuine vacancy requiring appropriate skill levels and pay a minimum salary, which can differ by profession. Ensuring compliance within these parameters has added an administrative layer to the recruitment process. Yet, it also presents an opportunity for businesses to refine job roles and offer focused training and localized skill development, fostering a highly specialised internal talent pool.

Strategic Use of Global Business Mobility Routes

The introduction of the Global Business Mobility routes constitutes a pivotal reform in UK immigration policy, aimed at facilitating business and talent movement post-Brexit.

Global Business Mobility Visa Categories

Under the Global Business Mobility routes, there are several visa categories designed to support various business needs. Each category targets specific types of employees and scenarios:

• Senior or Specialist Workers: This category allows multinational companies to transfer established employees from overseas entities to the UK branch.
• Graduate Trainees: Tailored for the transfer of graduate employees as part of a structured training programme.
• UK Expansion Workers: Created for senior managers or specialists establishing a UK branch or subsidiary of an overseas business.
• Service Suppliers: This caters to employees of overseas service providers who are coming to the UK to deliver a contract.
• Secondment Workers: It is pertinent for employees who are being seconded to the UK as part of a high-value contract or investment.

These routes are designed to streamline the process of bringing in necessary international talent and facilitate compliance with UK immigration regulations.

Secondment Workers and International Growth

Secondment Workers play a critical role in the Global Business Mobility strategy, enhancing international collaboration and investment. Companies utilising this route can send experienced employees to the UK to share knowledge and skills critical to the delivery of specific projects.

Companies looking to scale rapidly can capitalise on the Scale-up route, which requires a UK entity to sponsor candidates who will fill a job role recognised as being on the Shortage Occupation List or requiring a PhD in a STEM subject.

International Sportsperson is another notable category within the mobility framework, which is specifically designed for elite sportspeople and coaches who would be employed by a UK sports club or organisation.

It is imperative for UK businesses engaging with these immigration routes to remain diligent in their compliance obligations, ensuring that they adequately meet the conditions set for sponsorship and that their employees’ activities align with their visa parameters.

Frequently Asked Questions

The following addresses crucial changes and requirements UK businesses face regarding sponsor licences and employment of EU nationals in the post-Brexit landscape.

How have the eligibility criteria for UK sponsor licences changed post-Brexit?

UK businesses now need a sponsor licence to employ most workers from outside the UK, a new measure since the end of free movement between the UK and the EU.

What are the new compliance obligations for UK businesses employing EU nationals after Brexit?

Employers are expected to fulfil strict reporting duties, maintain records, and ensure EU employees have valid immigration status or applicable visas following Brexit guidelines.

How does Brexit affect the processing times for UK sponsor licence applications?

The processing times for sponsor licence applications have increased significantly, with a six-fold increase in delays reported for the period from Q4 2020 to Q4 2021 due to the rise in applications post-Brexit.

In what way has Brexit altered the Certificate of Sponsorship process for UK employers?

Employers now have to assign a Certificate of Sponsorship to each foreign national they hire, including EU citizens, who were previously exempt due to freedom of movement.

Can EU nationals be employed without a sponsor licence in the UK after Brexit?

EU nationals arriving in the UK post-Brexit will need to be sponsored unless they are eligible for status under schemes such as the EU Settlement Scheme or other immigration categories that do not require a sponsor.

What measures must UK employers take to ensure sponsorship compliance in the post-Brexit environment?

UK businesses must regularly audit their processes, ensuring all sponsored employees’ details are accurate and up-to-date, and that they are meeting the Home Office’s requirements to maintain their status as a licensed sponsor.

Looking for expert immigration advisers? Buckingham Legal Associates specialises in immigration law and can help you with a variety of applications such as sponsor licences, partner visas and skilled migrant visas.