In a significant policy shift, the UK government has committed to revoking sponsor licences if employers attempt to pass on the costs of skilled worker sponsor licences or certificates of sponsorship (CoS) fees to employees. This move, announced in Labour’s ministerial statement on November 28, 2024, and implemented on December 31, 2024, aims to protect migrant workers from exploitation and unfair treatment.
Background and Policy Changes
Previously, employers could recoup certain immigration-related costs from employees, including the Immigration Skills Charge (ISC), which is payable every time a CoS is issued. However, the new policy prohibits employers from passing on the sponsor licence fee, associated administrative costs, and the CoS fee to employees. The government has also indicated that this ban will be extended to other sponsored work routes.
Implications for Employers
Employers who violate this policy risk having their sponsor licences revoked. This can lead to significant reputational damage, financial loss, and upheaval for existing sponsored workers who may need to find a new sponsor or leave the UK. The Home Office has emphasized that the sponsor licence benefits the employer and should not be funded by the worker.
Protecting Migrant Workers
The policy change is part of a broader effort to tackle exploitation and ensure that migrant workers are not saddled with sponsorship costs. Recent scandals in sectors such as care have highlighted the need for stronger protections for sponsored migrants. By prohibiting employers from passing on these costs, the government aims to prevent work-related debt and unfair treatment of staff.
Compliance and Legal Advice
Employers are advised to seek legal counsel to ensure compliance with the new regulations. ‘Clawback’ clauses in employment contracts and other attempts to recoup immigration-related costs may be subject to scrutiny under the new guidance. Legal experts can help employers navigate these changes and avoid penalties and sanctions.
Conclusion
The UK government’s commitment to revoking sponsor licences for passing on skilled worker sponsorship costs represents a significant step towards protecting migrant workers and ensuring fair treatment in the workplace. Employers must adapt to these changes and seek legal advice to remain compliant and avoid the severe consequences of non-compliance.
