On 1 January 2021 the new Immigration Points Based system comes into law ending free movement and forcing the majority of UK organisations to hold a sponsor licence in order to recruit non-settled EU and non-EU workers.
New EU arrivals including those from non-EU countries and Switzerland (but not including Ireland) will be treated the same as those from the rest of the world.
But most HR departments aren’t ready for the biggest change to immigration law in 45 years. Only
around 3% of UK limited companies are currently holding a sponsor licence according to the
Government’s latest register of sponsors , putting any chance of retaining and recruiting overseas
talent well out of their reach.
Businesses without the correct credentials will miss out on the competitive talent pool as most
international workers will only consider job offers from firms already listed as Home Office-approved sponsors.
Don’t forget Brexit
January 2021 may still seem a long way off for many HRs, especially with the Covid-19 pandemic
consuming every working moment. But the global pandemic is causing delays to the application
The Home Office has advised that the wait time between submitting the application and a decision
being made currently stands at eight weeks, but this is likely to increase significantly as
more businesses apply closer to the Brexit deadline.
Upon application, the Home Office will assess your organisation. HR will need to submit an online
application and, in most cases, send four original or certified copies of specific documents to prove
the company is established. Documents can be certified using very specific wording, by either the
issuing authority or a practising barrister, solicitor or notary or, for some financial documents, a suitably qualified accountant.
The Home Office may set up a meeting at your premises as part of a pre-licence visit, where your HR systems and reasons for applying for a licence will be reviewed along with the company’s ability to track their employees, and store and report information.
If successful, your company will be awarded an ‘A’ rating and a licence for four years, and given
access to a Sponsor Management System where a designated employee can issue Certificates of
Sponsorship (CoS), report migrant activity and changes to the employer’s structure.
But if your application is refused, there’s a six-month cooling off period before being able to apply
again. You may be able to immediately apply if you did not provide documents or information by a
specific deadline but only for reasons outside your control.
The penalties of being non-compliant
The other danger is with HR departments either assuming they’re exempt from the 2021
immigration changes, or they’re simply unaware of the risks of being non-compliant by leaving
preparations and applications too late.
In fact, accidental non-compliance is a major concern, especially for HR Directors, Chief Operating
Officers and Financial Directors who are often responsible for ensuring that sufficient measures are
in place. Failing to comply to the new immigration rules can result in hefty fines, removal of EU and non-EU workers, loss of sponsor licence for those already with one, and even criminal charges for senior business leaders and board members.
Those who already hold a licence for non-EU employees will automatically be able to sponsor EU
migrants under the new Skilled Worker / Intra Company Transfer (ICT) routes. But again, if the
business isn’t ready for the new immigration rules, where licence holders will have to report and
record on its EU workers as well as its non-EU employees, then it will be very easy to make mistakes with paperwork and procedures, leaving the company vulnerable to penalties.
If you’re a current sponsor then your business is obliged to keep an extensive list of specific records
on each of the sponsored workers, which will extend to newly employed EU talent who are subject
to sponsorship from New Year’s day. These include a copy of their passport identity page and UK
visa / residence permit showing ability to work for the sponsor, copies of degree certificates,
professional accreditations and payslips, contracts of employment, and attendance and absences
You’re also required to report certain events within 10 days on the UKVI’s online Sponsorship
Management System (SMS) for example, unexplained absences, failure to attend on the first day,
changes in an employee’s circumstances such as salary, job or immigration category, if employment
suddenly ends or if there’s a change in the sponsor’s circumstances like change of ownership or
Any change to the structure or ownership of your business must be reported through your Sponsor
Management System to ensure compliance. In some circumstances, just a report of the change is
fine but if there is a change of direct owner, it could mean surrendering the licence and reapplying.
Records and reports are so specific that even a small discrepancy can lead to a sponsor having their
licence suspended or revoked. In effect, your organisation is acting on behalf of the UKVI to police
employment based immigration and ensure no abuse of the system.
Forecast your skill requirements
Whether you hold a licence now or you need to apply for 2021, HR should regularly forecast their
staffing requirements against the need to recruit overseas as this will affect recruitment budgets,
especially with EU workers included within the new immigration rule changes.
The cost of a four year licence to hire international workers starts from £536 for a small company and increases to £1,476 for a large corporate. Plus, the cost to hire a worker, which is around £7,500 for up to five years from October 2020, payable up front.
With Brexit only two months away, it is vital HR departments plan now to avoid any penalties later. A new points based system along with changes to the sponsor licence rules can cause confusion and
concerns but by reviewing the business needs now and by asking the right questions now, HR can
ensure that their organisation remains compliant and competitive as we go into a New Year and a new era of immigration policy.