Sponsor compliance round up: genuine employment is the hot topic

There are changes to the caseworker guidance as well as sponsor guidance and together these confirm the Home Office is very focussed on genuineness of employment. So, what do they mean by this, and what can you do about it?

Genuine employment

When the Home Office refer to ‘genuine employment’, they don’t just mean that the sponsored worker is genuinely employed. Below are some key areas sponsors should review in this regard to ensure compliance with how the Home Office interprets this concept.

• Check contracts with a third party and agency workers are compliant – A sponsor cannot hire out sponsored workers or have them work for a third party in a routine role. Sponsors must submit evidence, usually a client service agreement, which demonstrates that there is a contract for delivery of a non-routine service or project that has a clear end date.
• Check the salary requirements are met for each sponsored worker – A sponsor must pay the required minimum salary and comply with National Minimum Wage Regulations. If the salary is less than the average for the sector in the region but more than the going rate for the role stated in Appendix Skilled Occupations, the Home Office may seek an explanation for this.
• Align the role at the appropriate skill level – Now that the salary requirements for the Skilled Worker route are significantly higher, closer attention will be paid to whether the sponsor has correctly aligned the role to a suitable occupation code using CascotWeb (warwick.ac.uk). Sponsors may be tempted to align the role to a lower skilled occupation code, which attracts a lower going salary rate. If the sponsor intentionally chooses an inappropriate code, this may lead to suspension or revocation of their licence.
• Make use of hierarchy charts – The Home Office are making more use of hierarchy charts when assessing sponsor licence applications. They will want to see where sponsored workers fit into the chart and to check there are credible management roles for managing workers.
• Ensure that, if required, sponsors are registered with a regulatory body – The Home Office should check that the organisation is registered to provide the services they are seeking to sponsor e.g. legal services or medical services. If the sponsor states that they are exempt from registration, evidence of their exemption must be provided. Following a rule change on 11 March 2024, care providers in England are required to be registered with Care Quality Commission if they are undertaking a regulated activity.
• Only make sponsorship requests that align with the company’s operating requirements – If the organisation has traded for less than 12 months, there may not be a verifiable record of their presence in the industry and ability to manage employees. If a young organisation requests a large Certificate of Sponsorship (CoS) allocation increase, the Home Office may complete a light touch digital review against Companies House, or they may request documentation to verify that the business intends and is able to offer genuine employment at the volume requested.

What trigger points prompt scrutiny by the Home Office?

Previously, sponsor licence renewals and annual CoS allocation requests acted as trigger points for reviewing licence compliance. However, since annual allocations have become automatic and sponsor licences due to expire on or after 6 April 2024 are now held indefinitely, these have fallen away.

Triggers they now rely on include:

• Initial sponsor licence application;
• HMRC data indicating potential issues e.g. low pay, pay after visa expiry, supplementary employment outside of immigration conditions;
• An in-year request to increase a CoS allocation;
• A defined CoS request (for an overseas Skilled Worker applicant);
• A change in the pattern of CoS usage;
• A change in the SOC (standard occupation classification) codes being used by a business; and/or
• A sponsor change of circumstances notification, e.g. change of company structure.

Errors in understanding sponsor obligations and visa requirements in any of the circumstances above can lead to compliance action from the Home Office and greater scrutiny generally. It is important to get seemingly small sponsor licence requests correct from the outset, and to have systems in place to monitor compliance with any salary and supplementary employment requirements for individuals working within your business.

If you have any queries about this update or need assistance with a sponsor licence application or sponsor compliance review, please contact a member of our immigration team.