Employing overseas workers: 15 commonly asked questions

Authors: May Cheung and Annabel Mace, Squire Patton Boggs

Major changes to the UK's immigration rules affecting the requirements for sponsoring overseas skilled workers came into force earlier this year. What impact do these changes have on employers, and will hiring overseas workers, including right to work obligations, continue to become more challenging? 

Following on from our recent webinar, we answer 15 of the questions most commonly asked by organisations that employ overseas workers.

Changing requirements - your questions answered

The rules that govern the recruitment of overseas workers are intricate and subject to change. The following questions cover subjects ranging from right to work checks and sponsor licence holders' obligations, to discrimination issues during recruitment, flexible working requests for sponsored workers and immigration implications post-TUPE.

1. For those with pre-settled status, do we need to carry out right to work checks, and if not, how do we know if they are here legally after the expiry date? 

Employers are still required to carry out pre-employment right to work checks for those with pre-settled status, but follow-up checks are no longer required, even though pre-settled status has an expiry date. Provided the employer completes a valid initial check on a pre-settled status holder before the commencement of employment and they are not knowingly employing someone without the right to work, the Home Office will not take civil penalty action against them.

2. If we have used an Identity Documentation Validation Technology (IDVT) service provider to carry out right to work checks on a valid British or Irish passport, do we need to carry out any further steps? 

Yes. Once the Identity Service Provider (IDSP) sends you the results from their verification of the passport, the employer is still required to carry out an imposter check to ensure the individual present is the same as the person shown on the results from the checks, which usually include a copy of the photo identity document that has been checked, eg passport. Without this imposter check, the right to work check will not have been completed and the employer will not obtain a statutory excuse.  

3. For EU nationals employed before 30 June 2021, do we need to carry out retrospective right to work checks? 

It will depend on the type of documentation the employer holds for those employees. If the employer completed a valid initial right to work check on an EU national in accordance with Home Office guidance at the time the check was done to obtain a statutory excuse (eg a manual check on an EU passport before 1 July 2021), they do not need to do a retrospective check. The employer should not therefore be issued with a civil penalty even if it later transpires that the individual does not have the right to work, providing the employer is not knowingly employing the employee without the right to work. However, if the employer has been made aware (eg through an internal audit) that an EU national whose employment began before 1 July 2021 does not have a lawful status in the UK, as the employee has not been able to prove their right to work (usually in the form of a Home Office share code) or that they have a valid pending application with the Home Office, the employer should seek advice in order to take appropriate action. This might include the termination of their employment.

4. We have employees with more than two years' service employed in roles that are not eligible for a sponsorship visa. When their visa is about to expire, is there an  unfair dismissal risk?

If the role is not eligible for sponsorship and the employee has no other right to work in the UK, this will be a potential fair reason for dismissal, and so should not give rise to a successful unfair dismissal claim providing a fair process is completed in relation to that dismissal.

5. What checks do employers need to carry out to check candidates' sponsorship if they are applying for supplementary 20-hour-a-week roles?

Employers will need to carry out the usual online right to work checks to ensure the candidate's status allows supplementary work. In addition, as supplementary employment must not exceed 20 hours per week and must not take place during the contracted hours for their sponsored employment, employers should obtain a letter from the candidate's sponsor to confirm:

• they are continuing to work for their sponsor;
• the job description and occupation code of their sponsored employment (for routes other than Skilled Worker whose supplementary employment is not in the Immigration Salary List); and
• their contractual working hours.

Those on the Skilled Worker route can undertake supplementary work only if the work qualifies for sponsorship, ie it is in an occupation listed in Tables 1, 2 or 3 of Appendix Skilled Occupations.

6. New Entrants - is the 70% salary applicable only to shortage occupations or all skilled work occupations?

The New Entrant rate is applicable to all eligible Skilled Worker roles (not just shortage occupations) provided certain requirements are met, eg the applicant is aged under 26; is a student who has completed a degree in the UK from a higher education institution or holds a Graduate visa etc. Note that those relying on the New Entrant rate can apply only for a Skilled Worker visa that takes them up to four years' total stay including any previous period spent in the UK under the Graduate visa or Skilled Worker visa route. On extension beyond the four years, the higher salary rate at that time must be met.

7. Do we need to carry out right to work checks on self-employed subcontractors?

The legislation relating to the prevention of illegal working and civil penalties applies only to employees, not those who are genuinely self-employed. However, the Home Office's Employer's Guide to Right to Work Checks (version 23/09/24) states:

• "Where the worker is not your direct employee (for example, if they're self-employed) you are not required to establish a statutory excuse, but you must still carry out these checks (and retain evidence you have done so) to comply with your sponsor duties"; and
• "You are strongly encouraged to check that your contractors and labour providers carry out right to work checks in accordance with this guidance on people they employ, engage or supply (or carry out these checks yourself). This includes anyone in your supply chain using a substitute to perform work on their behalf."

This suggests that the Home Office intends to take a stricter approach in relation to all types of worker, particularly against organisations that hold a sponsor licence. 

8. Can the right to work check be done before an employee starts work on their first day of employment?

Yes, employers can potentially carry out right to work checks on the first day of employment, but to obtain a statutory excuse they will still be required to prove that the checks were carried out before the start of employment. Therefore, if a check cannot be done before the first day, the employer should retain evidence that the check was done before the start of the employee's contractual hours. Employers should also have a clear written policy that employment will not start unless a valid right to work check has been completed and ensure this policy is applied in practice.

9. Can an employee on a Skilled Worker visa work overtime if the overtime work is related to the job specified on their Certificate of Sponsorship (CoS)?

Yes, a sponsored worker can work overtime in the same role as specified on their CoS provided that they are remunerated for the additional hours, so that the salary they receive for the hours they work still meets the minimum applicable salary threshold.

10. Do we need to notify the Home Office if a sponsored worker is going to take maternity leave?

Yes, if a sponsored worker takes maternity leave, you need to report this as a reduction in salary within 10 working days of the date on which they start to receive statutory maternity pay. A further report should be made when they return to work.

11. If we do not have a sponsor licence, will there still be a risk of discrimination when refusing to sponsor a candidate? 

Yes, an employer will be at risk of a claim for indirect discrimination for refusing to sponsor a candidate unless it has an objective justification for not doing so. It is difficult to be certain whether not having a sponsor licence will be considered an objective justification as there is no legislation or guidance on this issue and the most relevant case law relates to a period before the introduction of sponsor licences. In reaching a finding, an employment tribunal is likely to take into account the size and resources of the organisation as well as how likely it is that the licence would have been granted and how long the process would have taken (particularly if the role in question needed to be filled quickly and other suitable candidates were available to fill the role within a shorter period).

12. Can we include wording on adverts that candidates must have the right to work?

A blanket refusal to offer sponsorship without an objective justification could put you at risk of an indirect discrimination claim. If the role being advertised is not at the required skill level eligible for sponsorship, then you can state in the advert that candidates must have the right to work because the role is not eligible for sponsorship and you should be able to defend an indirect discrimination claim on that basis. If the sponsorship eligibility depends on the salary on offer, then it may be difficult to use that as an objective justification because some candidates may be eligible for sponsorship based on a lower salary due to their personal circumstances, eg under the New Entrant rate or because they are eligible for a transitional arrangement having been sponsored under the Skilled Worker route under the rules in place before 4 April 2024.

13. How successful are we likely to be in defending a claim of discrimination with finances identified as the objective justification?

It's difficult to say because there is no legislation or guidance on this issue and the most relevant case law (which suggests cost is unlikely to be a justification) relates to a period before the introduction of sponsorship and the current higher costs. In reaching a finding in relation to a claim for indirect discrimination where the organisation is relying on its finances as an objective justification, an employment tribunal is likely to take into account the organisation's size, resources and whether or not it has a genuine need to balance its books. It may also take into account the fact that many candidates are willing and able to contribute to the costs of sponsorship to reduce the financial burden for the sponsor (although the Immigration Skills Charge cannot be passed on to the individual).

14. When an employer has TUPE'd employees across, do we need to do both the right to work and the imposter check within 60 days.

When employees are transferred under TUPE, the new employer can choose to rely on a statutory excuse from right to work checks carried out correctly by the previous employer. However, if the previous employer did not conduct the original checks correctly, the new employer will be liable for a civil penalty if an employee is later found to be working for it without permission. For this reason, it is recommended to complete new right to work checks within 60 calendar days of the TUPE transfer, particularly as this may be the only way that you can determine when any follow-up checks should be carried out for employees with time-limited permission to work in the UK. In carrying out these new checks, the new employer will need to check the required documents and do the imposter checks within 60 calendar days of the transfer to obtain a statutory excuse.

15. If a sponsored employee asks for flexible working in that they want to reduce their hours, can we do this and do we need to notify the Home Office?

You can allow a sponsored employee to reduce their hours only if the salary paid will not drop below the minimum General salary threshold (usually £38,700); this threshold cannot be pro-rated according to the hours actually worked. The employee should also be at least the Going rate salary as per the SOC code under which they are sponsored; however, the Going rate can be pro-rated according to the hours actually worked. If the adjusted total salary will fall below the applicable salary thresholds, you will not be able to approve the flexible working request. If the requirements can be met, a report should then be made to the Home Office via the Sponsor Management System within 10 working days of the change, setting out the new salary and hours so that the Home Office can assess the report and ensure it is permitted. If they do find that the salary requirement can no longer be met, they could curtail the individual's sponsorship visa.