Sharp rise in sponsor licence suspensions and revocations hits UK employers

Increasing numbers of visa sponsorship licences being suspended or revoked by the Home Office so should employers be worried?’ That outcome could have serious consequences for the employer’s ability to recruit and retain talent, so how likely is it to happen and what can be done to minimise the risk? We’ll ask an immigration specialist.

This is People Management’s headline reporting on the latest Home Office figures showing the number of employers who had their skilled worker visa sponsorship licence cancelled in the second quarter of 2024 almost doubled to 1,023, compared to just 519 in the first quarter. Of the employers who lost their sponsorship licence in the second quarter, 524 had it suspended, while 499 were revoked. These figures mark a dramatic increase compared to the second quarter of 2023, when just 89 employers had their licence suspended and 28 had it revoked. 

The figures are the result of the previous government’s policy to clamp down on illegal migration. In recent times UKVI has prioritised enforcing sponsor compliance to curb perceived abuses of the sponsor licence system. That approach has led to UKVI suspending or revoking increasing numbers of visa sponsorship licences shown up in this latest data.

So what do we make of what’s going on and how should employers protect against the risk? Earlier I caught up with immigration specialist Alex Wright to discuss it: 

Alex Wright: “I think there are a couple of things at play here. One is just there are a lot more sponsors than there used to be. Before Brexit and before changes were made to the Skilled Worker route in 2020 not that many people needed sponsor licences and since Brexit, and certainly since the pandemic, it has become a really important thing for most employers to bring in their skilled workers. So we've needed more people to get these sponsor licences and I think there are some people who got them and simply weren't prepared for the compliance that went with them and have fallen foul of the Home Office. Equally, there have been some very specific issues, particularly in the health and social care sector, where we know there have been some abuses of the system and the Home Office have made some changes to the system to crack down on. But yes, there have definitely been a lot more people with a lot more sponsored licences, which I think, proportionally, just means more people are going to make mistakes on them. Also, we know the Home Office have been tougher on compliance, increasing fines for getting things wrong and conducting more compliance visits.”

Joe Glavina: “The headline, the People Management headline asks the question should employers be worried? So I'll put that question to you. Should they be worried?”

Alex Wright: “I don't think employers need to be worried if they're prepared and they understand the responsibilities that go with having a sponsor licence. A lot of the guidance can seem very complex and very daunting but, essentially, you just need to think from your perspective if the Home Office were to show up tomorrow, if the Home Secretary would decide to walk in and look at your staff records, would they be up to date? Would you be able to say who's doing what, where they are, what they're getting paid, if they're on a sick day, that they're on a sick day, if they're on annual leave that you have a record of that. Do you have the personnel who are meant to have access to your sponsor licence? Do they know how to view it? Do they know how to make changes? Have they been making the changes that are required when people leave or join, or if there be any changes in company structure, have those been reported? Essentially, if you're doing the basics right there shouldn't be cause for concern, but you need to be aware of what those basics are, make sure you've got your personnel in place, and make sure that your HR team knows what they're doing.”

Joe Glavina: “Can I just ask you what it means to have a sponsor licence suspended or revoked, Alex. As I understand it, there is no right of appeal and there’s a mandatory 12-month cooling-off period before they can reapply. So, pretty dire consequences.”

Alex Wright: “Yes, so there are a few different things the Home Office can do to a sponsor licence. They can temporarily downgrade you, in which case they will enforce an action plan on you, which they will charge you for, and then they will come back to see how you've done and whether or not you've been able to remedy the issues they've had. During that time you won't lose your existing employees, but you won't be able to sponsor any new workers so if you're in the middle of hiring that can be a real pain in the backside and, yes, if ultimately the Home Office revoke you do have to go through that 12-month cooling off period and before you can apply for sponsor licence again you will have to also go through the issue of letting your sponsored staff go and there can be huge reputational damage as well. This is tends to be quite public and the Home Office are not afraid to get their publicity team to show what they've done from their perspective to maintain the integrity of the system and if that means your business ends up in a headline, as far as they are concerned, so be it.”

Joe Glavina: “Last point, Alex. The article advises employers to be “UKVI audit ready” because, they warn, inspection visits can be without notice.”

Alex Wright: “So the Home Office have the ability to come either announced or unannounced. If they tell you they're coming, they normally give you a couple of days to get some documents ready. They will ask for documents in advance. Normally, things like HR records, PAYE records, records of sponsored workers, all of the sites where you have people employed. To be honest, none of this is that difficult. All of this is stuff that employers should have access to or the ability to provide. We certainly do get asked from time to time by larger employers to do full audits for them. So they will just give us access to all of their records, all of their documents and say, look, have a look through this and make sure there are no glaring omissions. To be fair to the Home Office, they are not there to catch out of the world's smallest mistakes. If people have made minor errors or there are small things employers can do to make things better they will just tell you. What they are really there for is concerns about people who are not being paid to do the jobs they're meant to be doing, are not at the sufficient skill level, and concerns where employers don't know where their workers are. So if you have good HR practices you will probably be most of the way there. One thing that employers really can fall down on is having done compliant right to work checks. We've provided a lot of advice on that and sometimes employers will ask us to go through their right to work policy to make sure they've got all of that right and to ensure that all of their workers are there presently and lawfully.”

That People Management article is called: ‘‘Increasing numbers of visa sponsorship licences suspended or revoked – should employers be worried?.” We’ve put a link to it in the transcript of this programme.

Link to People Management article: ‘‘Increasing numbers of visa sponsorship licences suspended or revoked – should employers be worried?’”