Immigration Update: New Year Brings Sponsorship Changes

As we start a new year, the Home Office has updated their primary Worker and Temporary Worker Guidance documents to set out some significant changes following measures outlined in the 28 November 2024 written statement on visa sponsorship to Parliament. Not all commitments have been included in the updated sponsor guidance documents from 31 December 2024 and 1 January 2025, however the key changes employer sponsors should be conscious of are as follows:

• Restrictions limiting which sponsorship costs an employer is able to pass on to its employees. Employers are restricted from passing on sponsor licence fees, certificate of sponsorship fees, the immigration skills charge, which was already prohibited, and “associated administrative costs”. This change will certainly have an impact on clawback clauses in contracts between employers and sponsored workers. Agreements will need to be carefully reviewed to ensure that they do not breach the new restrictions applying any transitional protections appropriately, and safeguarding future clawback agreements. 
• Significant changes to key personnel a sponsor must have that will affect new sponsor licence applications and could present challenges to some prospective sponsors. The updated guidance requires that sponsor licence applications made after 31 December 2024, must have at least one level 1 user who is both an employee, director or partner and a settled worker. It is anticipated that this change could prevent some organisations such as start-ups and overseas businesses starting out in the UK, from becoming sponsors.
• Limitations regarding sponsorship in a “personal capacity” that mainly relate to the sponsorship of workers in private households such as nannies. Where a person is not eligible for sponsorship because they would be employed in a personal capacity, there may be other non-sponsored immigration routes available that can be considered. 
• New addition to “you” and “your” referred to in the sponsor guidance to not only include directors, owners, key personnel and those involved in day-to-day running of the organisation but also the person named as “a Person with Significant Control” at Companies House. 

In addition, minor changes to the guidance documents cover:

• Clarification that a Defined CoS must be assigned to a worker within 90 days of the date it is allocated to a sponsor rather than within the previous, three months.
• Correction to UKVI enforcement practices for sponsor licence holders, so that a licence can be B-rated and subject to an action plan twice within any rolling four-year period. 
• Updates to the title of the Certificate of Sponsorship category on the Sponsorship Management System relating to post-study sponsorship to prevent errors when switching from a student or Graduate visa: to make a clear distinction between the two visa routes. 
• Updated information for sponsors relating to evidence of immigration status now that BRPs are no longer issued from 31 December 2024. 

There has not been any published updates to sponsorship compliance that is projected to extend compliance action plans from three to up to twelve months, and introduce longer cooling-off periods for businesses that repeatedly breach sponsorship compliance duties.

For further information or assistance please contact our business immigration team today.