Immigration Costs: What Can Employers Pass onto Sponsored Workers?

Recent guidance from the UK Home Office explicitly prohibits employers from passing on sponsorship-related costs to sponsored workers. While this change currently applies to the skilled worker visa route, it is expected to extend to all other sponsorship routes in the near future. Employers can no longer recoup immigration fees, such as certificate of sponsorship (CoS) and sponsor licence fees, from their sponsored employees.

These restrictions build on earlier measures that prohibited passing on the Immigration Skills Charge. Employers must now reassess their sponsorship processes to ensure compliance with these updated regulations.

What Has Changed?

The updated guidance reflects the Home Office's commitment to preventing exploitation, as outlined in the Written Ministerial Statement of 28 November 2024. Key changes include:

1. Sponsor Licence Costs:
   Employers are prohibited from passing the costs of a sponsor licence application, including administrative fees, to sponsored workers. This applies to both new licence applications and amendments (e.g., adding the Skilled Worker route to an existing licence).
2. Certificate of Sponsorship (CoS):
   The cost of assigning a CoS can no longer be passed on to workers. This restriction applies to any CoS issued on or after 31 December 2024.

These updates aim to protect sponsored workers from unfair financial burdens associated with their employment in the UK.

When Does This Take Effect?

The changes came into force on 31 December 2024 and are now legally binding. Employers who have relied on recouping sponsorship costs from workers must immediately adjust their practices to avoid penalties.

Risks of Non-Compliance

Failure to comply with these rules can lead to serious consequences, including:

• Sponsor Licence Revocation:
  Non-compliance can result in sponsor licence revocation, which may disrupt business operations and force sponsored workers to leave the UK.
• Financial and Administrative Costs:
  Losing a sponsor licence involves significant costs related to applying for a new licence, administrative delays, and reputational damage.
• Reputational Damage:
  Word of non-compliance may spread among sponsored workers and prospective hires, deterring talent from seeking employment with your organisation.

Given the Home Office's increased scrutiny, employers must prioritise compliance and ensure that all sponsorship-related costs are handled appropriately.

What Costs Can Employers Still Cover?

While sponsors are restricted from passing on costs related to CoS and licence fees, they can still fund or subsidise workers' expenses, such as:

• Application fees for dependents (e.g., dependent visa UK)
• Relocation costs
• Visa extensions and renewals

Employers looking to optimise their sponsorship processes should consider tools like Borderless, which offers streamlined solutions for sponsor management system integration and compliance automation.

How Borderless Can Help

Navigating sponsorship compliance is more complex than ever. With Borderless, employers can ensure full compliance through real-time monitoring, automated alerts, and access to expert support for tasks such as sponsor licence number management and change of circumstances reporting.

If you're unsure about how these new regulations affect your business, get in touch for tailored guidance and support.

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