The UK government is cracking down on sponsor licence compliance, making it more crucial than ever for businesses to follow visa rules. Companies that repeatedly breach immigration laws or commit serious employment violations will now face harsher penalties, including extended bans of at least two years from hiring overseas workers. Even minor breaches will trigger stricter action plans, ensuring long-term compliance.

Additionally, unethical practices such as charging skilled workers inflated sponsorship fees are being targeted, particularly in the care sector, where exploitation has been widespread. Employers must now cover all recruitment costs, preventing workers from being burdened with unfair debts.

Cutting corners could mean losing access to international talent, licence revocation and hiring restrictions. Companies must take proactive steps to meet their obligations, not just to avoid penalties but to ensure ethical and sustainable recruitment practices.

What Are the Requirements of a UK Sponsor Licence Holder?

As a sponsor, you must meet certain responsibilities and need to make sure your workers have the right skills, qualifications, and accreditations for their roles and keep records to prove it. You can only assign Certificates of Sponsorship (CoS) for jobs that meet sponsorship criteria, and if a worker isn’t following their visa conditions, you must inform UK Visas and Immigration (UKVI).

You’re also responsible for following UK employment laws and any special requirements for workers under 18, scale-up workers, and offshore workers. Strong HR systems are a must, you’ll need to track immigration status, keep up-to-date records, monitor attendance, and report any major business changes, like mergers or changes in overseas partnerships.

For certain workers, like those in scale-up or offshore roles, you’ll have additional reporting duties, such as confirming when they start or leave their jobs. If you don’t meet these responsibilities, your sponsor licence could be at risk, so staying on top of these requirements is essential.

Importance of Accurate Record-Keeping for Sponsor Compliance

As a licensed sponsor, maintaining accurate and up-to-date records is a fundamental compliance requirement. The Home Office expects sponsors to keep detailed records of their sponsored workers and report certain updates such as being absent from work or salary reductions. The updates must be reported to the Home Office within a certain time period depending on the circumstances (see page 10). These records (including key documents listed in Appendix D of the sponsor guidance) can be stored in either electronic or paper format, but they must be readily accessible upon request. Failing to maintain proper documentation can raise compliance concerns, potentially leading to penalties (for right to work breaches) or even licence revocation. Sponsors must also ensure records are retained for the required period either one year after sponsorship ends or until the Home Office assesses them, whichever is shorter.

During a compliance check, the Home Office examines whether a sponsor has robust HR systems in place to track and report on sponsored workers effectively. This includes verifying that proper procedures are followed for maintaining records, reporting changes in worker status, and ensuring adherence to sponsorship duties. Pre-licence checks focus on whether a sponsor has sufficient systems ready, while post-licence visits assess whether these systems are being applied correctly. Keeping accurate records not only ensures compliance but also demonstrates that a business is meeting its obligations under immigration law, reducing the risk of enforcement action.

Compliance Through Immigration Status Monitoring

Accurate record-keeping is a key compliance requirement for sponsors, particularly when it comes to monitoring the immigration status of sponsored workers and students. The Home Office expects sponsors to have systems in place to track visa expiry dates and ensure that no individual continues working or studying beyond their permitted stay in the UK.

Sponsors must keep copies of essential immigration documents, such as passports, biometric residence permits or eVisas, and any other relevant status documents, to demonstrate that their sponsored workers and students have the legal right to be in the UK.

During a compliance visit, the Home Office assesses whether a sponsor has an effective system for tracking immigration status and contact details. Sponsors must be able to show how they monitor visa expiry dates, whether through digital records, spreadsheets, or HR systems. If a sponsor cannot demonstrate a clear tracking process or relies on workers to self-report, they risk non-compliance. Similarly, sponsors must keep up-to-date contact details for all sponsored individuals, ensuring they can provide both current and historical records if requested. Any discrepancies found during an inspection may indicate non-compliance, requiring further investigation.

Immigration and Wider Legal Compliance

As a sponsor, you must ensure that any worker you employ has the necessary qualifications, experience, and legal right to work in the UK. This includes verifying their credentials, keeping records, and only assigning Certificates of Sponsorship (CoS) for genuine roles that meet immigration requirements. If a worker no longer meets the conditions of their visa, you must take appropriate action and inform UK Visas and Immigration (UKVI).

Beyond immigration compliance, you are also responsible for following UK employment laws, including minimum wage regulations, working hours, and pension requirements. Depending on your industry, you may need to secure appropriate licences, register with regulatory bodies, and conduct background checks where required. Ensuring full legal and regulatory compliance is essential to maintaining your sponsor licence and avoiding penalties.

Compliance in the Recruitment Process

The Home Office expects sponsors to have a robust system for recording key recruitment and employment details, ensuring that sponsored workers and students meet visa requirements and perform the roles they were approved for.

For worker sponsors, this means keeping records such as professional accreditations, national insurance details, and payslips. Any discrepancies between the employment contract, job description, salary, or role stated on the CoS and the reality of the worker’s employment could raise compliance concerns. If a worker is found to be doing a different job than stated or is paid less than required, the Home Office may mark the sponsor as non-compliant.

During compliance checks, the Home Office does not dictate how records should be kept but will expect sponsors to demonstrate an effective system for storing and retrieving required documents.

Compliance Audits: What Sponsors Need to Know

During a Home Office compliance audit, your business will undergo a two-part review. First, an interview will be conducted with the Authorising Officer, who must be available to explain your systems and compliance processes. They can be accompanied by another knowledgeable team member, but legal representatives may only provide guidance, not lead the discussion.

Following the interview, the Home Office will review employee files, potentially up to 50, depending on the size of your organisation to ensure ongoing compliance with sponsorship duties. Audits may be random or triggered by intelligence, and while some are unannounced, most come with a week’s notice.

Failing an audit can lead to serious consequences, including suspension or revocation of your sponsor licence, affecting both your ability to hire sponsored workers and the visa status of current employees. To stay prepared, you should maintain clear policies, regularly review compliance procedures, and ensure all key personnel, especially the Authorising Officer, are up to date on their responsibilities.

Another key factor in compliance is the requirement for a genuine vacancy. The Home Office checks whether the sponsored role is legitimate and necessary. If a job description has been exaggerated or manipulated to bring a worker into the UK under false pretences, the sponsor may be penalised. For example, if a worker is sponsored as a business development manager but is actually working as a care assistant, this would be considered a breach.

The Scoring Process

When the Home Office conducts a compliance visit, they assess how well a sponsor is fulfilling their responsibilities. The scoring system determines whether the sponsor meets the required standards for managing sponsored workers. Sponsors receive an overall rating of either ‘Met’ or ‘Not Met.’ A ‘Met’ rating indicates full compliance and typically results in an A-rating. A ‘Not Met’ rating, however, can lead to serious consequences. If issues are found during a pre-licence visit, the application may be refused. If compliance failures are identified in a post-licence visit, the sponsor could face a downgrade to a B-rating, suspension, or even licence revocation, depending on the severity of the issues.

The Home Office evaluates sponsors based on key HR compliance areas. To receive a ‘Met’ rating, a sponsor must meet the required standards in all areas. If they fail even one, they will receive a ‘Not Met’ rating overall. However, the Home Office does consider the sponsor’s willingness and ability to correct any issues. For instance, if a sponsor has misunderstood their duties but is eager to improve, this may be taken into account. In contrast, if a sponsor shows a complete disregard for compliance and poses a risk to immigration control, the consequences are likely to be more severe.

If the breaches are minor, the Home Office may allow the sponsor to correct them. However, more serious issues could result in a B-rating, suspension, or licence revocation. In addition to HR compliance, the Home Office also assesses worker-specific compliance. This means ensuring that a worker’s job role, salary, and employment conditions align with what was originally reported. Any changes to working hours, job responsibilities, or location must be properly recorded through the Sponsor Management System (SMS).

With the Home Office tightening regulations and increasing scrutiny, sponsors must proactively manage their duties, from accurate record-keeping to ethical recruitment practices. Non-compliance can lead to licence revocation, financial penalties, and reputational damage. By implementing robust HR systems, staying updated on immigration laws, and ensuring transparency in recruitment, businesses can safeguard their ability to hire international talent while maintaining a compliant and ethical workplace.