Karen Kaur, Legal Director from Migrate UK talks to People Management about the sanctions and the impact on UK employers - full article below.
People Management explores how new measures to curb immigration may affect businesses facing skill shortages, as provisional data shows fewer workers entering the UK.
The amount of time employers can be barred from hiring overseas workers after repeated visa rule breaches will be extended, the government has announced.
Under the changes set to be made alongside the employment rights bill, the period of time businesses will be sanctioned for repeat offences will be doubled from the current maximum of 12 months to at least two years.
Additionally, the sanctions will apply to employers found guilty of other employment violations, such as failing to pay the national minimum wage.
The timeframe for action plans, which outline for businesses that have committed minor visa infractions, will increase significantly, from three to 12 months.
The changes will also mean that while these action plans are in place, employers will be restricted from bringing in overseas workers. If they fail to make the improvements, they will see their visa sponsor licence revoked.
The government has also stated it will not wait until employers have committed serious breaches of the law before taking action if there are already signs of rule breaking.
According to government figures, it has revoked approximately 450 sponsor licenses within the care sector since July 2022.
Similarly, recent Home Office data revealed 1,023 businesses had their skilled worker visa sponsorship license suspended or revoked in the second quarter of 2024, compared to just 519 in the first quarter.
“This is the latest crackdown and it won’t be the last,” Chetal Patel, head of immigration at Bates Wells, told People Management. “It’s a firm signal by the government that there will be tougher sanctions.
“Exploitation of vulnerable migrant workers is a key concern for the care sector and we’re seeing a sharp uptick in targeted Home Office compliance visits to deal with unscrupulous employers.”
Lynne Adams, legal director and head of immigration at HCR Law, said: “These proposals have been introduced in response to businesses relying on the immigration system over the years to address skills shortages.”
She added that, in some sectors, shortages had led to "unscrupulous recruiters and employers exploiting overseas nationals”.
Karendeep Kaur, legal director at Migrate UK, told People Management that the sanctions would have a “detrimental effect company wide” for employers, causing reputational damage and disruption to the running of the business.
“Should a licence be revoked, all sponsored workers will have their leave curtailed by UKVI, giving them 60 days to leave the UK or to seek alternative immigration status in the UK,” she explained.
“This could mean employees that have been trained and upskilled taking their learnings to competitors. In addition, the company will no longer be able to source talent from overseas for any skills shortages they are experiencing.”
What steps should employers take?
Patel said employing migrant workers “isn’t a tick box exercise” and that, if an employer acts as a sponsor, there should be a “genuine vacant role” and they should have systems and processes in place to ensure compliance with sponsor obligations, including regular audits.
“Sponsorship is seen as a fragile gift; a privilege and not a right,” she added.
Charlie Pring, immigration expert at Taylor Wessing, told People Management that employers should check their onboarding processes to ensure they have “robust systems” to verify right to work before employment starts, and where necessary to repeat checks for those on time-limited visas.
Additionally, he said that while fines only applied to employees who are working illegally, Home Office best practice guidance required employers to check the right to work of contractors too.
“Alongside other reasons such as the risk of reputational damage and impact on insurance coverage, failure to do this may be a compliance breach for businesses that hold a sponsor licence, as having exemplary right to work processes is a condition of sponsorship,” Pring added.
Decline in overseas workers
The government’s latest crackdown on rogue employers comes following the release of Office for National Statistics figures, which revealed that the number of people entering the UK on a work visa had steadily fallen in the first half of 2024.
The provisional data showed that, in June 2024, just 184,000 people entered the UK on a work visa, compared to 213,000 people in March 2024 and 219,000 people in December 2023.
These findings align with provisional figures issued by the Home Office earlier this year, which found that the number of overseas workers and students applying for UK visas fell by a third in July 2024 compared with the same period the previous year.
The drop in overseas workers entering the UK coincides with the previous government’s changes to visa rules in April this year. The reforms prevented care workers from bringing partners or children with them to the UK, and raised the minimum salary sponsors must pay workers to £38,700, from the previous threshold of £26,200.
Gavin Jones, partner and head of immigration at Osborne Clarke, told People Management that the reduction in net migration that has taken place over the past 12 months was largely down to a drop in care workers and students, who have also been restricted from bringing dependants with them to the UK.
“This headline ‘success’ is itself damaging the UK as care worker [numbers] decline, causing problems in the health sector,” he said.
“These measures have been unpopular with employers, many of whom are already facing difficult decisions regarding the sponsorship of overseas workers,” added Adams, noting that they were exacerbating existing recruitment challenges, particularly in the care sector.
She said that, to overcome these, businesses could “rethink recruitment by prioritising skills-based hiring rather than placing excessive emphasis on experience and formal qualifications”.
However, Patel argued that the government should be doing more to find solutions to the “critical shortages” facing the care, construction, hospitality and manufacturing sectors.
“Upskilling UK workers takes time and resources and this isn’t a luxury that employers have,” she said.
Jones agreed that there was no easy solution for employers. “Easing reliance on international workers can only be addressed if there is a pool of talent in the UK that takes up those roles,” he explained.
“The vast majority of UK businesses would recruit locally if they could. The UK government costs of sponsoring an international worker and family could easily exceed £30,000, so it is not a ‘cheap labour’ option by any means.”
Kaur said that despite the government’s desire to reduce immigration figures, it was inevitable that employers would need to continue to attract highly skilled workers to the UK. “Employees are no longer willing to be bound by borders, which stresses the importance for businesses to not only offer competitive salaries but also other benefits such as living conditions, private healthcare, private education and political and economic stability, which will focus their attention on UK employment opportunities.”
‘Expect more restrictions’
“Businesses should expect more restrictions to business immigration visa routes in the coming months, as part of the drive to bring net migration down,” said Pring.
He predicted further increases in salary thresholds or visa fees, the potential reintroduction of a resident labour market test to give priority to applicants who are settled workers, or even sector-specific visa caps.
Pring advised employers to “act now” to prepare for future restrictions by assessing and planning for future recruitment needs. “In case more barriers are introduced in the future, [...] employers that don’t already hold a licence should consider getting one now,” he said.
“Sponsors that have UK-based colleagues on personal visas that can't be extended or that don't lead to settlement, like the graduate visa, should look to secure their long-term status by switching them into a sponsored visa early to take advantage of current rules.”
For more details, read the CIPD’s report on migrant workers and skills shortages in the UK