Significant changes made to guidance on sponsoring workers

The government published a number of significant changes to their guidance for work sponsors

Brief summary of key changes

• New restrictions have been introduced restricting which sponsorship costs an employer is able to pass on to the employee – this will affect clawback agreements between employers and sponsored workers.
• They have added to the list of people who fall within the definition of “you and your” when referring to the sponsor.
• Significant changes have been made to rules regarding the key personnel a sponsor must have – these will affect new sponsor licence applications and could present obstacles to some prospective sponsors.
• New restrictions have been added to the guidance regarding sponsorship in a personal capacity – these mainly relate to the sponsorship of workers in private households (such as nannies).

Passing on or recouping of costs

The costs of sponsoring workers in the UK are significant, including not only the costs of sponsorship itself but also the Immigration Skills Charge, visa fees and the Immigration Health Surcharge, as well as any professional legal fees that may be incurred to support the process. It is therefore common for employers to require sponsored workers to meet some of these costs directly, or for employers to recoup some of these costs if the employee leaves their employment before the end of their sponsorship.

The guidance now includes further restrictions on the costs that can be passed on to or recouped from workers. Specifically, a licence will normally be revoked if a sponsor recoups, or attempts to recoup:

• the Skilled Worker sponsor licence fee (including the fee for adding that route to an existing licence) and any associated administrative costs (including premium services) – this applies where a sponsor recoups, or attempts to recoup, these on or after 31 December 2024, even if the costs were incurred before that date;
• the Certificate of Sponsorship fee for a Skilled Worker, where that Certificate was assigned on or after 31 December 2024 – this does not apply to recouping of costs where the Certificate of Sponsorship was assigned before this date; and
• the Immigration Skills Charge for a Skilled Worker or a Senior or Specialist Worker – this was already prohibited and continues to be prohibited.

The restriction on “associated administrative costs” is not mentioned in relation to the assignment of a Certificate of Sponsorship or visa application, so it may still be possible to recoup priority service and legal costs for those processes from a sponsored worker (subject to such an action being reasonable in employment and contract law).

Employers and their advisers should take care when applying clawback agreements to ensure that they do not breach the new restrictions and apply any transitional protections correctly. They should also ensure that future clawback agreements are in line with the new guidance.

“You and your” – who is a sponsor?

The guidance for sponsors is primarily an instruction manual explaining what current or prospective sponsors need to do. It sets out what “you” need to do to become a sponsor and what “your” compliance obligations are once you become a sponsor. 

Previously, when speaking to the sponsor as “you” or “your”, this included any:

• owner;
• director;
• key licence personnel (the Authorising Officer, Key Contact and Level 1 Users);
• person involved in the organisation’s day-to-day running.

A new addition has been made to this list in the Glossary to include a “person recorded on your Companies House profile listing as a Person with Significant Control”. 

Key personnel eligibility

The guidance continues to require that key personnel be based in the UK and that they be a paid staff member or an office holder. As before, the guidance also requires that at least one of the level 1 users be an employee, director or partner. 

It also continues to require that at least one of the level 1 users on the licence be a “settled worker”. 

However, in a significant change, the guidance now requires that where the licence is applied for after 31 December 2024, the sponsor have at least one level 1 user who is both an employee, director or partner and a settled worker.

For many years, this was the way that licences and key personnel worked in practice, since only a single level 1 user could be nominated as part of the sponsor licence application. Although additional users could be added later, including legal representatives, this meant the first nominated person needed to meet both of these requirements. 

However, since updates to the licence application form began to allow a sponsor to nominate multiple level 1 users in the licence application, it became common for legal representatives to be appointed as a level 1 user from the beginning, alongside the employee, director or partner of the sponsor. Where the nominated representative was a settled worker, this freed up the option for the sponsor’s internal user to be non-settled. This new change to require the sponsor to have a level 1 user who meets both requirements removes this option.

This change only applies to sponsor licence applications made after 31 December 2024. The guidance confirms that if an organisation has a licence which was valid on or before this date, they continue to benefit from the old rules where they needed a level 1 user who was an employee, director or partner and a level 1 user who was a settled worker, but these requirements did not need to be met by the same person. However, in the future, UKVI may align these requirements so they recommend, as a matter of best practice, that sponsors appoint at least one level 1 user who can meet both requirements.

Other further updates to the guidance on key personnel include:

• key personnel must not be legally prohibited from becoming a company director, unless a court has given permission to act as a director or to promote or form a business and as long their sponsorship role doesn’t contravene this permission. Previously a person could be a Key Contact or level 2 user if they were only prohibited from being a director due to being an undischarged bankrupt, but this exemption has been removed in favour of the above;
• any nominated person must have a valid National Insurance number, unless they are exempt from requiring one). Although new to the official guidance, this reflects information and instructions that have been in place on the Sponsorship Management System and communicated by UKVI to ILPA previously.

Sponsorship in a personal capacity

The guidance now confirms that sponsor licences must not be used to employ or engage a worker “in a personal capacity”. Two examples are given of when this may apply:

• an individual person or household wishes to employ or engage a worker, or workers, in a personal capacity and the sponsor is not otherwise conducting business or providing a service in the UK
• the worker, or workers, will be employed by, or engaged for the personal benefit of, an individual who works for the sponsoring organisation, or a close relative or partner of that individual, and the role is unrelated to the sponsor’s wider activities.

There is a long background to this change. It has always been the case that individuals cannot become licensed sponsors (unless they are sole traders who wish to sponsor someone to work in their business). This has meant that it has been difficult to sponsor many roles that involve working in a private household, such as personal assistants/secretaries, nannies*, carers and cooks. This led to two solutions – they were sometimes sponsored by the employer of someone in the household they worked for, or they were sometimes sponsored by a “family office”, a business established for the purposes of managing the family/household’s affairs. 

UKVI did not like either of these approaches and in recent years this has led to refusals of licences/visas in circumstances where it may have otherwise appeared that the letter of the guidance was being met but UKVI were not entirely satisfied in terms of intentions and genuineness. 

Nannies also face additional difficulties for sponsorship as the changes in April 2024 for nannies and au pairs no longer meets the minimum skill level for sponsorship, can only be extend an existing Skilled Worker visa to work in the same role with the same sponsor.