Published 7 October 2020: HR Review sought out Migrate’s Manager Director, Jonathan Beech for his views on the cost of being non compliant with the 2021 immigration rules. On 1 January 2021 the new immigration points based system comes into law. Ending free movement and forcing the majority of UK organisations to hold a sponsor licence in order to recruit non-settled EU and non-EU workers.
New EU arrivals, including those from non-EU countries and Switzerland (but not including Ireland), will be treated the same as those from the rest of the world.
Jonathan noted that most HR departments aren’t ready for the biggest change to immigration law in 45 years. Only around 3% of UK limited companies are currently holding a sponsor licence according to the government’s latest register of sponsors, putting any chance of retaining and recruiting overseas talent out of their reach.
The penalties of being non-compliant
There is a danger HR departments either assuming they’re exempt from the 2021 immigration changes, or they are simply unaware of the risks of being non-compliant by leaving preparations and applications too late.
In fact, accidental non-compliance is a major concern, especially for HR Directors, Chief Operating Officers and Financial Directors who are often responsible for ensuring that sufficient measures are in place. Failing to comply to the new immigration rules can result in hefty fines, removal of EU and non-EU workers, loss of sponsor licence for those already with one, and even criminal charges for senior business leaders and board members.
Those who already hold a licence for non-EU employees will automatically be able to sponsor EU migrants under the new Skilled Worker / Intra Company Transfer (ICT) routes. But again, if the business isn’t ready for the new immigration rules, where licence holders will have to report and record on its EU workers as well as its non-EU employees, then it will be very easy to make mistakes with paperwork and procedures, leaving the company vulnerable to penalties.
If you are a current sponsor then your business is obliged to keep an extensive list of specific records on each of the sponsored workers, which will extend to newly employed EU talent who are subject to sponsorship from New Year’s day. These include a copy of their passport identity page and UK visa / residence permit showing ability to work for the sponsor, copies of degree certificates, professional accreditations and payslips, contracts of employment, and attendance and absences from work.
There is a requirement to report certain events within 10 days on the UKVI’s online Sponsorship Management System (SMS) for example, unexplained absences, failure to attend on the first day, changes in an employee’s circumstances such as salary, job or immigration category, if employment suddenly ends or if there’s a change in the sponsor’s circumstances like change of ownership or address.
Any change to the structure or ownership of your business must be reported through your Sponsor Management System to ensure compliance. In some circumstances, just a report of the change is fine but if there is a change of direct owner, it could mean surrendering the licence and reapplying. Records and reports are so specific that even a small discrepancy can lead to a sponsor having their licence suspended or revoked. In effect, your organisation is acting on behalf of the UKVI to police employment based immigration and ensure no abuse of the system.
With Brexit only two months away, it is vital HR departments plan now to avoid any penalties later
A new points based system along with changes to the sponsor licence rules can cause confusion and concerns but by reviewing the business needs now and by asking the right questions now, HR can ensure that their organisation remains compliant and competitive as we go into a New Year and a new era of immigration policy.