Employing foreign nationals: sponsorship
Andrew Osborne of Hammonds LLP continues a series of articles on employing foreign nationals with a look at the rules on sponsorship. Employers wishing to employ foreign nationals under tier 2 or tier 5 of the points-based immigration system must apply for a sponsorship licence to be able to issue certificates of sponsorship to potential migrant workers.
Introduction
Under the five-tier points-based immigration system, migrants coming to the UK from outside the European Economic Area and Switzerland to work or study must have enough points to qualify for entry clearance (see Employing foreign nationals: points-based system in this series for more details). Before they can apply for entry clearance, applicants under tiers 2, 4 and 5 need a sponsor to issue them with a certificate of sponsorship. Sponsorship is not required for tier 1, and tier 3 is currently suspended.
The sponsor will be a UK-based employer (for tiers 2 and 5) or college (for tier 4) that wishes to employ a particular migrant or that has accepted a migrant onto a course. To become a sponsor an organisation must be licensed by the UK Border Agency (UKBA). The UKBA has issued Guidance for sponsor applications - tier 2, tier 4 and tier 5 of the points-based system (PDF format, 1.3MB) (on the UKBA website) for employers and colleges applying for a licence.
Sponsors must register separately for each tier and sub-category under which they wish to sponsor migrants. A register of sponsors on the UKBA website provides details of licensed sponsors' names, locations, ratings (see below) and the tiers and sub-categories for which they are licensed.
Applying for a licence
Applications for a licence can be made electronically only and once an application has been made the applicant employer or college must send the UKBA certified copies of the required documents and the correct fee within 10 working days. The documents to be provided depend on the type of organisation applying for a licence. The UKBA has published lists by organisation type and these are set out in appendix A of the guidance referred to above. Full details of the applicable fees are also on the UKBA website.
When applying for a licence, sponsors are required to allocate specific roles to members of their staff: "authorising officer", "key contact", "level 1 user" and "level 2 user". The level 2 user role does not have to be filled if all administrative tasks are undertaken by the level 1 user. The role determines the type of access permissions that the user has to the UKBA sponsor management system (details on the UKBA website) and the functions that the user can perform. Although one member of staff could perform all required roles, it is advisable to have more than one level 1 user to cover sickness and holiday. The level 1 user has the overall management of the sponsor management system. The level 2 user has limited access to the system. The guidance referred to above sets out the specific requirements for each of the four roles.
Once licensed, sponsors can use the sponsor management system to carry out day-to-day sponsorship activities and report changes to the UKBA (for example, a change of address). The system currently allows tier 2 and tier 5 sponsors to assign certificates of sponsorship and fulfil their reporting duties in respect of sponsored migrants. Tier 4 sponsors will have this ability from autumn 2009.
When considering a licence application, the UKBA will seek to establish that the applicant employer or college is a genuine organisation operating legally in the UK; that it is trustworthy (ie that there is no history of dishonesty in relation to immigration offences or immigration crime); and that it is capable of carrying out its sponsorship duties (ie that its processes and HR practices are robust enough to enable it to fulfil its sponsorship duties). As part of the latter assessment the UKBA looks at five individual areas of the employer's HR systems (in relation to tiers 2 and 5) and the college's admissions (in relation to tier 4), namely its:
- monitoring of immigration status and prevention of illegal employment;
- ability to maintain migrant contact details;
- record keeping;
- migrant tracking and monitoring capabilities; and
- professional registrations and accreditations.
In certain circumstances the UKBA may refuse the licence application or award the applicant organisation a B-rating. The circumstances justifying refusal of a licence or the granting of a B-rating are set out in the UKBA guidance. Sponsors that are B-rated are likely to face more frequent visits by the UKBA inspection team.
A B-rated sponsor will be required to improve its compliance performance either in relation to its HR systems and monitoring or in relation to its sponsorship duties to be upgraded to an A-rating. If it does not, it risks having its licence withdrawn altogether. To assist the sponsor in making the necessary improvements an action plan will be drawn up jointly by the UKBA and the sponsor.
A-rated sponsors have less interference from the UKBA in relation to the management of the licence and receive visits only in line with the standard visiting procedure.
There is no right of appeal against the refusal of a licence, but an unsuccessful applicant can re-apply at any time.
Certificates of sponsorship
Once licensed, a sponsor can apply for certificates of sponsorship.
A certificate of sponsorship is not an actual certificate or paper document
but a virtual document similar to a database record. Each certificate has
a unique reference number and contains information about the job for which the
certificate is being issued and the migrant individual's personal details. When making
an application the sponsor needs to
complete migrant and sponsorship details on the application form, plus, where
appropriate, details of how the job satisfies the resident labour market test,
whether or not it is in a shortage occupation, or whether or not it is an
intra-company transfer (see Employing foreign nationals: points-based
system in this series for more details). The certificate of
sponsorship enables the migrant to apply for entry clearance or leave to remain
in the
Sponsors' duties
Licensed sponsors are required to fulfil certain duties. Some duties apply to all sponsors whereas others are specific to sponsors that are licensed under certain tiers of the points-based system.
Record keeping duties - All sponsors must keep certain
records (for example, a copy of each sponsored migrant's passport or
Reporting duties - Matters that all sponsors must report to the UKBA include:
- within 10 working days, a sponsored migrant not turning up for the first day of work at the expected time or being absent from work for more than 10 working days without the sponsor's permission;
- within 10 working days, a sponsored migrant's contract of employment terminating for any reason; and
- details of any third party in the
All reporting duties are compulsory for sponsors of tier 2 and tier 5 migrants. However, the first two reporting duties will not become compulsory for tier 4 sponsors until the migrant-reporting functionality is rolled out within the sponsor management system for tier 4 (likely to be between autumn 2009 and March 2010). Prior to then, sponsors can report voluntarily to the UKBA.
Complying with the law - All sponsors must ensure that migrants are legally entitled to do the job in question and have the appropriate occupational registration or professional accreditation where this is legally required.
Cooperating with the UKBA - All sponsors must allow the UKBA access to their premises on demand and B-rated sponsors must comply with action plans (see above).
Tier-specific duties - There are a number of duties that are specific to sponsors under particular tiers of the points-based system. Details of tier-specific duties are set out in the UKBA guidance.
Enforcement regime
The UKBA can make visits (both announced and unannounced) to sponsors' premises to check compliance with the sponsor duties above and with the prevention of illegal working provisions. It can also set review points at which it will review sponsor activity. When visiting a sponsor, the UKBA will issue a civil penalty if there is evidence that the sponsor has not complied with the rules on the prevention of illegal working (see Employing foreign nationals: avoiding illegal working in this series for more details). It will also consider criminal prosecution where appropriate. In certain circumstances the UKBA may decide to withdraw a licence, downgrade it from an A-rated to a B-rated licence, or give the sponsor a warning.
Suspension
If the UKBA has reason to believe that a sponsor is guilty of a serious breach of an obligation and the breach poses a threat to immigration control (for example if the sponsor has allocated certificates of sponsorship to migrants who do not qualify to come into the UK), the sponsorship licence may be suspended pending the UKBA downgrading or withdrawing it. The suspension will be lifted if the UKBA decides not to withdraw the licence.
Renewing or surrendering licences
Sponsors' licences last for four years unless they are withdrawn or surrendered. A sponsor will need to hold a licence for as long as it wishes to employ sponsored migrants even if it does not propose to sponsor any more migrants.
If a licence holder no longer wishes to sponsor migrants and no sponsored migrants are working for, or studying with, it, the licence holder may surrender its licence by writing to the UKBA.
TUPE transfers
If a business or organisation in which migrants work is
transferred under TUPE from one company or organisation to another or there is
a service provision change involving migrants, the new employer must notify the
UKBA about the transfer and apply for a sponsor licence, both within 28
calendar days of taking over the business. If it fails to do so, the UKBA may
reduce the permission for the sponsored migrants to stay in the
If a business that is not a registered sponsor is taken over by a company that is a registered sponsor or there is a service provision change and the new service provider is a registered sponsor, the existing sponsor (ie the transferee) must tell the UKBA about the transfer within 28 calendar days of the event.
If a registered sponsor is taken over by another registered sponsor or, in the event of a service provision change, both service providers are registered sponsors, the transferor sponsor organisation must tell the UKBA about the change and which organisation now has responsibility for its sponsored migrants, again within 28 calendar days of the transfer. The transferee must also tell the UKBA about the change within 28 calendar days of the event and provide details of the migrants for whom it is now responsible.
Next week's article will be a checklist on employing foreign nationals and avoiding illegal working and will be published on 27 July.
Andrew Osborne is Partner, Sports Group and Head of Business Immigration at Hammonds LLP (Andrew.Osborne@hammonds.com).
Further information on Hammonds LLP can be accessed at www.hammonds.com.
