Avoiding Non-Compliance Sanctions as an Employer - New Compliance Checks Updates and the UKVI Plans to Rely on Technology

On 10^th September 2021, we wrote about the new UK PBS Sponsorship Reforms Road Map (2022 & beyond), which outlines a series of planned changes to the way in which foreign workers and students will be sponsored to come to the UK. The roadmap states, “As we modernise our immigration system, we will deliver a streamlined, simplified and modern sponsorship system that enables a more efficient operation, for users and the Home Office, and encourages compliance”. On the specific subject of compliance, the roadmap goes on to explain that a package of changes is planned for the management of sponsor licences; “The new system will allow for greater understanding about the sponsor and their sponsored worker for the Home Office, helping to support compliance. By bringing together information held by other departments about organisations, caseworkers will have a fuller picture of the data on a sponsor and sponsored worker, allowing for quicker decision-making”. In this article, we will explain how UK employers with a sponsor licence can avoid the potential for a sanction, especially in the context of the new automated checks UKVI is expected to introduce.

Automated salary checks will be a key focus area for UKVI

The new roadmap for PBS sponsorship reforms makes it clear that UKVI intends to link immigration records with other governmental systems to automate checks, some of which relate to compliance. The best example of this is the automated salary checker, which will pull data from HMRC and compare this to the salaries being paid to migrant workers. This will avoid the situation whereby an applicant says they will be paid an amount that will meet the minimum salary requirements, only to be paid less by their employer in reality. As such, automated checks of this nature will prevent the misuse of the Skilled Worker visa route. On this matter, the roadmap explains, “The transformed sponsorship system will make greater use of technology to identify abuse, and we will continue to work closely with our key partners. Our new salary checks with HMRC will enable us to ensure that employees are being paid the amount their employers committed to paying them….Sanctions for non-compliance may range from conditions or limits on recruitment, managed action plans, or suspension and revocation of a sponsor licence”.

Employers and employees making use of the sponsorship system should be aware that this new salary checking feature is being piloted in the fourth quarter of 2021, hence it is essential to take action as soon as possible. Existing sponsors may wish to consider completing a retrospective check for all sponsored workers, comparing the salary records held by HMRC with salaries details provided to UKVI (i.e. when applying for a CoS/visa). Where there is a potential shortfall, employers may need to make up the difference to ensure the records match. If you are unsure of the best course of action, speak to an immigration Solicitor who will be able to explain how to proceed given the circumstances (although it is advisable to complete the analysis first across all sponsored workers).

The challenge for UKVI when it comes to automated salary checks is that many sponsoring employers do not use PAYE (because they are not necessarily required to use PAYE), and hence there is a potential risk of discriminating against those who do not routinely send payroll data to HMRC.

Other ways to avoid UKVI sanctions

Other than the automated salary checker, at this stage, we can expect that UKVI will keep compliance checks broadly in line with the current system. They do say, however, “We will target compliance visits to those sponsors who present a higher risk or have no track record of compliance”. It is not exactly clear what this means, but it suggests that businesses with a track record of non-compliance and those who have not been visited by a UKVI compliance officer may be higher on the list for potential checks than those who have had at least one successful visit. Regardless, the best plan of action is to always be ready for a visit, no matter which site, day, or time.

One of the most effective ways to avoid UKVI sanctions is to commission a third-party specialist to carry out regular and impartial mock compliance visits. These are typically provided by immigration solicitors with expertise in the compliance visit process. An auditor can visit unannounced where this is preferred and will follow the same process carried out by UKVI, including assessing how up to date your records are, verifying the effectiveness of your sponsor systems and processes, and checking that the required documents are safely stored (e.g., copies of passports and work visas). Where an issue is identified, the person carrying out the mock audit will feed this back to the necessary staff and recommend any changes to be made. Once these changes are made, they can carry out further visits to check for compliance. The main advantage of using a mock audit service is that it will ensure the ongoing compliance of your organisation.

Wrapping up

Complying with the Home Office’s duties of a sponsor licence holder is not only essential to secure a licence in the first place, but it will also ensure your business can retain the right to hire foreign workers. Having a licence suspended, revoked, or downgraded not only means that you may lose all of your existing sponsored workers (as their leave may be curtailed), it can also have negative reputational implications for your organisation. By putting in place robust systems, processes, training, and regular mock compliance audits, you can be as confident as possible that you have done all you can to remain compliant and to avoid damaging sanctions.