Home Featured Immigration for Business What is a Sponsorship Licence?

What is a Sponsorship Licence?

Recruiting a skilled workforce from outside the European Economic Area (EEA) has become vital for employers in many UK sectors where skills shortages in the resident labour market persist, including finance, technology and healthcare.

If you are a UK employer and want to recruit skilled non-EEA workers under the Tier 2 visa route, your organisation is required to hold a valid sponsorship licence.

To obtain a sponsorship licence, you will have to make a formal application to the Home Office.

If your application is successful and you are granted a sponsor licence, you will be permitted to recruit and employ eligible non-EEA workers, including Tier 2 and Tier 5 workers, under the Points-Based visa system.

A sponsorship licence is valid for four years. During this time you will be required to meet compliance duties consistently and effectively. Breaching these duties can result in Home Office penalties including suspension or revocation of your licence.

Eligibility for a sponsorship licence

You can apply for a sponsorship licence regardless of the size of your organisation or the sector you operate in. There are however a number of prerequisites which must be met:

  • You are operating as a legal business in the UK.
  • Your organisation can offer positions suitable for Tier 2 visas, that meet minimum salary requirements and skill levels.
  • The roles being recruited for must be genuine vacancies that cannot be filled by the resident workforce.
  • Pay the requisite fees for making an application and be able to meet the ongoing costs of a sponsor licence, such as the Immigration Skills Charge.

How to apply for a sponsorship licence

To apply for a sponsorship licence you need to complete an online application form and submit comprehensive supporting documentation.

As well as providing information about your organisation and the role(s) in question, you will need to evidence in your application that your HR systems and infrastructure will enable you to meet your sponsorship compliance duties. This includes the requirement to appoint the following key personnel:

  • Authorising officer – a senior figure responsible for overseeing the Sponsor Licence Management System (SMS)
  • Key contact – a main point of contact for the UK Visas and Immigration service
  • Level 1 user – a person responsible for the day to day management of your SMS

Once your application has been submitted, it will be considered by a Home Office caseworker who may elect to visit your organisation on-site as part of the decision-making process.

During this site visit, the Home Office will primarily be looking to check your HR systems and documentation to ensure you will be able to meet the compliance requirements of the sponsor licence.

If the Home Office approves your application you will be given a sponsorship rating – if you receive an A rating you will be added to the list of registered sponsors and can recruit Tier 2 skilled migrants immediately.

How to recruit Tier 2 workers

Once your sponsor licence is in place, you can now begin the recruitment process for hiring migrant workers.

Sponsor licence holders have to meet certain duties in respect of the recruitment process, before they can lawfully employ Tier 2 workers.

The role must first be advertised in accordance with the Resident Labour Market Test (RLMT), unless the role features on the current Shortage Occupation List.

The RLMT requires that you ‘test’ the market by placing two advertisements for the role in question open to UK applicants for a minimum of 28 days. In most instances one of the channels must be the online Universal Jobmatch service and another recognised channel.
The rules for the RMLT are strict and all job descriptions must accurately adhere to requirements. Records must also be kept in relation to the advertisements.

Many sponsors choose to seek legal guidance on meeting the RLMT requirement since non-compliance can result in penalties against the employer.

You must also assign a Standard Occupational Classification (SOC) code to the role being recruited for. SOC codes are a classification system the government uses to assess the correct skill level and minimum salary for jobs, as set out in the Code of Practice for Skilled Workers.

To find a Code of Practice you must first choose the SOC code that most closely matches the job you are looking to fill. If a job doesn’t meet all the conditions of the relevant Code of Practice you cannot issue the migrant worker a Certificate of Sponsorship.

Codes of Practice change regularly and choosing the right SOC code for a role is not a straightforward task. An immigration expert can help you navigate these classifications and strategically choose the best option for the roles you are recruiting.

If you have undertaken the RLMT, identified the correct SOC code and found your non-EEA candidate, you can proceed with assigning the Certificate of Sponsorship to the individual, who then makes their application to the Home Office for a Tier 2 visa.

What are my compliance duties as a sponsor?

As a sponsor licence holder, it is your responsibility to ensure you adhere to your compliance duties on a continued basis throughout the duration of your licence.
If you are found to be in breach of your sponsorship obligations your rating may be downgraded, or your licence suspended or even revoked. This will directly impact your ability to hire skilled points-based workers.

The Home Office requires that sponsors ensure compliance in the following areas:

Record Keeping – You must keep a sponsorship file for every Tier 2 migrant worker that contains required documentation.

Reporting – You are responsible for reporting changes in organisational circumstances on the Sponsor Management System (SMS) (such as change of address, or a company merger) and reporting the activity of your workers to the Home Office within strict timeframes. For example, you must contact the Home Office if:

  • The employee does not turn up for their first day of work
  • If the worker is absent for more than 10 days
  • If you terminate their employment
  • Substantive changes are made to their employment status
  • If a worker is affected by TUPE or similar protection

The worker is also under duties to inform of certain changes in circumstances as part of their visa conditions.

Compliance – You must continue to demonstrate that you comply with the eligibility criteria for a sponsor licence holder.

Support for sponsorship licence applications

Many organisations take the advice of immigration professionals prior to making their sponsor licence application to avoid issues, complications or delays. If you are unsuccessful with your initial application, they can also help you to appeal the decision.

Once the licence is live, failure to adhere to your responsibilities as a sponsor can lead to severe penalties, taking guidance from experts can ensure you are compliant and not at risk of your sponsorship licence being suspended or revoked.

Keeping up to date with changes to regulations and managing the duties and responsibilities of a sponsor is an involved process, but there are steps employers can take to ensure compliance that are not overly-onerous.

Once your application has been granted, continued legal advice and support can help your organisation efficiently navigate the ever-changing immigration legislation and policy, while remaining compliant so that when the time comes to apply to renew – your house is in order and ready for Home Office scrutiny.

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