The current competitive business landscape prevails worldwide, including the United Kingdom. Consequently, UK companies with sponsor licence that employ foreign workers must comply with salary regulations. With ever-changing legal frameworks in a country like the UK, companies might face significant risks, such as sponsor licence suspension, and potential revocation of sponsor licences. Therefore, UK companies must adhere to immigration law, including employee salary guidelines.
By understanding these crucial rules, employers can protect their business from costly repercussions, and employees can ensure their job stability and security in the country. A transparent approach to salary compliance fosters a healthy employer-employee relationship, improving job satisfaction and promotes retention among talented workers, especially in industries heavily dependent on skilled foreign workers.
Since regulations are subject to frequent changes, HR professionals and organisational leaders must diligently monitor and implement necessary adjustments as needed. By prioritising compliance with salary regulations, UK companies with sponsor licence can mitigate risks and demonstrate their commitment to being responsible and ethical employer in the UK.
Understand Salary Regulations to Avoid Sponsor Licence Suspension
When addressing the salary regulations for a UK sponsor licence, it is essential to understand the guidelines established by various regulatory bodies to ensure compliance. Below is an overview of the salary guidelines set by UK regulatory bodies.
- Minimum Salary Threshold
Employers holding sponsor licences must strictly adhere to specific salary requirements when hiring foreign skilled workers. The threshold is based on the visa type and the occupation of the foreign employee. For a skilled worker visa, the employer must pay higher of either the standard salary or the “going rate” to the employee.
However, some job roles are categorised under the Immigration Salary List (previously the Shortage Occupation List), for which the threshold might be lower than the general rate. On the other hand, for the Global Talent Visa, salary thresholds might be more flexible, focusing on the skills and contributions of the applicant rather than a set salary.
- Going Rates
Each occupation has a designated “going rate,” as specified in the immigration rules set by the UK Home Office. The going rate is the accepted amount paid to employees within occupational groups operating in a particular labour market. It is determined by a minimum salary corresponding to the salary code that aligns with the sponsor licence and is listed on the appendix Skilled occupation list.
- New Entrants
A new entrant refers to an individual who is at the early stages of their career and meets specific eligibility criteria. However, it’s important to note that being a new entrant does not simply mean that someone is applying for their first Skilled Worker visa or entering the UK for the first time.
An applicant qualifies as a new entrant if they meet specific criteria, such as being under 26 years old at the time of application, holding a postdoctoral position in certain scientific or academic fields, or actively working towards a recognised professional qualification in a UK-regulated profession.
Additionally, those pursuing full registration or chartered status with a relevant professional body, as well as individuals whose most recent visa was under the Student route, or Graduate route, may also be eligible. This classification allows for lower salary thresholds, making it easier for early-career professionals to secure Skilled Worker sponsorship.
- Part-time & Pro-Rata Salaries
A pro rata salary refers to a salary that is adjusted based on the number of hours worked compared to a full-time schedule. This ensures fair pay for part-time or variable-hour employees by calculating their earnings in proportion to a standard full-time salary. In the context of Skilled Worker visas, pro rata salaries are particularly important, as the going rate for an occupation must be adjusted based on the weekly working hours stated on the Certificate of Sponsorship (CoS). This helps maintain compliance with immigration salary thresholds while ensuring that workers receive the appropriate compensation for their working hours.
The going rates in Table 1, Table 2, and Table 2a of Appendix Skilled Occupations are based on a 37.5-hour week. The going rates in Table 3 of Appendix Skilled Occupations are determined based on different standard working hours: 40 hours per week for doctors, 37.5 hours per week for NHS Agenda for Change roles, different hours as stated for dentists, and the full-time worker definition for teaching occupations. Any change in weekly hours must be pro-rated accordingly.
Employers must pay the higher of the standard salary or the going rate. Additionally, the going rate must be pro-rated based on the weekly working hours stated on the applicant’s Certificate of Sponsorship (CoS). This ensures that salary calculations align with actual working hours, preventing underpayment.
The general threshold is the same, regardless of how many hours a week the applicant is sponsored to work. It cannot be pro-rated for part-time work. This may be £38,700, £34,830, £30,960, £29,000, £26,100 or £23,200, depending on the tradeable points option and whether transitional arrangements apply.
In all these scenarios, the company’s HR department must calculate the pro-rata salary accurately to ensure employees receive the correct amount.
How to Maintain Compliance to Avoid Sponsor Licence Suspension?
To maintain compliance and to avoid sponsor licence suspension, UK companies with sponsor licence must:
- Ensure all sponsored workers are paid at least the required going rate based on their occupation code and working hours.
- Accurately calculate salaries based on weekly working hours stated in the Certificate of Sponsorship (CoS) to avoid underpayment issues.
- Inform the Home Office of any salary adjustments, role changes, or working hour reductions that may affect compliance or different from the original Certificate of Sponsorship.
- If applying reduced salary thresholds (70%, 80%, or 90% of the going rate), verify eligibility based on Appendix Skilled Occupations and ensure compliance.
- Maintain accurate records of employee salaries and any adjustments.
- Stay updated with changes in immigration rules and salary requirements.
- Review salary structures, work hours, and CoS details periodically to ensure ongoing adherence to Home Office regulations.
- Ensure all salary payments are made by bank transfer and not as a cash payment.
- Cooperate with compliance checks and provide salary records when requested to avoid sponsor licence suspension or potential revocation.
Failure to adhere to these guidelines, may result in severe consequences, including the sponsor licence suspension. Therefore, employers should arrange a consultation with experienced sponsor licence solicitors, such as City Legal Solicitors, or immigration experts, to effectively navigate these regulations and to save sponsor licence suspension.
Minimum Wage Requirements
When applying for a new sponsor licence or maintaining an existing one, the employers must comply with the minimum wage requirements set by the UK government. This is particularly important, when the rate changes every year and if the employers are paid on a lower rate in line with the immigration rules. These requirements ensure that international workers are treated fairly and that the organisation sponsoring the foreign workers adheres to immigration rules. It is therefore necessary to meet the established standard salary range for sponsored employees.
How Does Salary Compliance Affect Visa and Sponsor Licence Status?
- If an employer fails to meet salary compliance requirements, this will lead to the refusal of the employee’s visa application or the cancellation of the employee’s existing visa due to the revocation of the employer’s sponsor licence. This might occur if the employee’s salary does not meet the standard salary threshold or if there are payment discrepancies.
- Non-compliance with the salary obligation might result in the sponsor licence suspension of the employer’s organisation.
- Non-compliance with the salary obligation might damage the reputation of the organisation and result in sponsor licence suspension or revocation of the licence.
Penalties for Non-Compliance
To avoid sponsor licence suspension, companies established in the UK must comply with various rules and regulations set by the Home Office. Failure to comply with these rules and regulations can result in significant penalties. The potential penalties for non-compliance with UK immigration law, particularly related to salary violations, include:
- Downgraded Licence Rating: Non-compliance can lead the Home Office to downgrade the employer’s sponsor licence from an A-rating to a B-rating. Although this process is time-consuming and costly, sponsor must develop an action plan to adhere to Home Office regulations to restore their licence rating.
- Sponsor licence Suspension: Serious non-compliance may result in sponsor licence suspension. During a sponsor licence suspension, the sponsor cannot issue new Certificate of Sponsorship (CoS). Additionally, this sponsor licence suspension may adversely affect the visa status of the sponsored employees within the organisation.
- Revocation of Licence: In cases of severe or repeated non-compliance, the Home Office may revoke the organisation’s licence. After revocation of the sponsor licence, the employer can no longer sponsor migrant workers.
- Reputational Damage: Failing to comply with immigration law also leads to reputational damage of the organisation. This might reduce the ability of the company to attract global talents.
- Legal Consequences: If the Home Office finds a serious violation of the UK immigration law, the directors or managers of the organisation need to face legal action from the UK government.
Strategies for Ensuring Compliance
To maintain sponsor licence status for legally employing foreign workers, it is essential for employers to comply with UK immigration law. The following strategies can assist the employers in maintaining compliance:
- Conduct regular audits to ensure that the UK companies with sponsor licence are aligned with UK visas and Immigration (UKVI) requirements. This helps identify potential issues in advance.
- Frequently check and review the documents. It is crucial to update employee’s information and ensure it is complete and accurate.
- Develop and provide training programs to all employees involved in the process of sponsor licence.
- Maintain accurate records of all sponsored workers, including contact details, job descriptions, and salary information.
- Report any changes in the circumstances of sponsored workers to the UKVI within the required timeframe.
- Understand the document retention requirements and ensure necessary documents are securely kept for the appropriate duration.
- Utilise HR management software to streamline keeping records, reporting and tracking compliance.
- Seek advice from sponsor licence solicitors to ensure a thorough understanding of the UK government’s rules and regulations.
How can City Legal help to Avoid Sponsor licence Suspension?
Maintaining compliance with Immigration salary regulations is not just a sponsor obligation. It is crucial for building a secure and thriving workplace, especially for sponsored employees.
Are you looking for experienced sponsor licence lawyers in the UK to handle your sponsor licence application? At City Legal solicitors, we have a team of dedicated sponsor licence lawyers, who provide tailor-made services to meet the requirements of our clients and help them successfully attain sponsor licence. Want to partner with us? Contact us today @ 020 8175 4000 or visit our website https://citylegalsolicitors.co.uk/ for more information.
