Immigration - ways your business can get it wrong!

This is the first in a series of articles looking at the common visa and immigration problems businesses experience and how to avoid the pitfalls.

Part 1 - Easily missed changes which must be reported to the Home Office

Often the first time a company is faced with even considering applying for a sponsor licence is after a candidate has been recruited to fill a key role and HR discover that the person doesn’t have the right to work in the UK or that they’re sponsored by a competitor and need a visa. 

It’s also not uncommon for this to happen when non-UK senior management are brought in from overseas at short notice to deal with a sensitive issue, to kick start a business turnaround or to instil or re-inforce corporate culture. HR are then not only faced with having to apply for a sponsor licence in a short space of time, but also to demonstrate to the Home Office that they are genuine and viable employers who take their compliance and reporting obligations seriously. This involves providing the Home Office with a “snapshot” of the company at the time of application, including its size and structure etc., as well as a number of mandatory documents evidencing the genuineness of the business in the UK. Often proof that the company has looked to the domestic labour market first before trying to hire the non-EU national (known as the Resident Labour Market Test) is also required. Once the application has been take care of, with the licence secured and the visa obtained, all things immigration and compliance often take a back seat, with the newly hired employee getting on with the role they were brought on board to do. What companies sponsoring individuals often neglect is keeping the Home Office updated on changes, both to the sponsored individual’s circumstances and in relation to the organisation. If they don’t, they risk serious issues for the business - up to and including the downgrading or revocation of the sponsor licence. 

TUPE transfers or changes in corporate structure

Reporting changes of ownership, transfers of migrants in or out of the sponsor business, or alterations to group structures to the Home Office are areas that are regularly overlooked. Typical examples of change of ownership and structure include where branches are added or removed and also where sponsored migrants are moved to other group companies named as branches on the licence. One of the most common reportable changes is where there is a share sale by the sponsor company or a change of parent company. Where such changes occur, organisations have up to 20 working days to notify the Home Office. TUPE transfers of migrants either from or to the sponsor licence must also be reported in the same time frame. Depending on the nature of the change, the sponsor licence may be revoked and the organisation must apply for a new one.  Late reports or a total failure to report, discovered by the Home Office on an audit, can not only lead to the loss of the licence in any event but can also lead the Home Office to conclude the organisation is not aware of its compliance duties, calling into question the appropriateness of granting the new licence it requires. Failure to obtain a new licence would lead to all migrants sponsored on that licence having their leave curtailed (cancelled) to 60 days.

Change to size of sponsor organisation

The fee charged by the Home Office for a sponsor licence varies according to the size of an organisation, with payments for medium and large businesses being more than double the fee payable by a business which is a “small” employer under Companies Act 2006. Following the recent introduction of the Immigration Skills Charge, companies with sponsor licences are required to report changes in their size (from small company to large, or vice versa) within 10 working days of the change. The rationale for this is that the Immigration Skills Charge is calculated automatically when a Certificate of Sponsorship is assigned via the sponsor licence. A small employer will pay a charge of £364 for each year of visa and a large employer will pay £1,000 per year. Failure to notify the Home Office of a change in corporate size will lead to the wrong Charge being applied. For growing employers, this may potentially lead to an underpayment with ramifications for their sponsor licence.  

Next time, we will look at reporting obligations for sponsored migrants.

To discuss immigration corporate reporting obligations or any business immigration issue, please contact a member of our business immigration team.