If you hold a sponsor licence and are outsourcing migrant / sponsored workers to work on other business premises we can advise on how to stay compliant with your sponsorship duties.
Nowadays, organisations often contract out major functions to specialised and efficient service providers who ultimately become valued business partners. This is certainly the case in the construction industry as well as the information technology sector.
A company may choose to outsource certain business functions to reduce and control operating costs, improve company focus, gain access to world-class capabilities, free internal resources for other purposes and streamline or increase efficiency for time-consuming functions.
In some cases, outsourcing involves the transfer of employees from one organisation to another. The question arises which organisation should be considered the employer of the person who is providing these services and, if the outsourced employee is a migrant worker, which organisation must hold a sponsor licence.
Who can be defined as an employer?
According to the Immigration, Asylum and Nationality Act 2006 an employer is someone who engages another person in a contract of employment. This may be a contract of service or apprenticeship.
The contract of employment can be expressed orally, in writing or implied.
Under the 2006 Act an employer is not liable for:
- the employees of a contractor
- a genuine self-employed person or freelancer, or
- workers from an employment agency who continue to be employees of that agency.
Who is responsible for the migrant worker?
Migrants working on a contract basis
Where a migrant is working on a contract basis and is being supplied by one organisation to another, their sponsor must be the organisation that has full responsibility for all the duties, functions and outcomes or outputs of the job the migrant is doing.
For example: Company A has signed a contract with a client Company B to complete a construction project within an agreed timeline. A migrant sponsored by Company A to do a job on the construction project may be sent to work for the length of the contract at Company B’s premises, but they remain employed by Company A throughout the whole period of the contract. As Company A is fully responsible for all the migrant’s duties, functions (such as absences, holiday, hiring and firing), outputs or outcomes, Company A must be the migrant’s sponsor.
Where the migrant is employed by the sponsor to fulfil a contractual obligation on their behalf on the premises of another organisation, the service or project the migrant is working on must have a specific end date, after which the project or service will have ended or will no longer be operated by the sponsor or anyone else.
A Certificate of Sponsorship (CoS) can only be assigned if the sponsoring organisation has genuine responsibility for deciding all the duties, functions and outcomes or outputs of the job the migrant will be doing.
The migrants fulfilling the contractual obligations must not be:
- agency workers, hired to another organisation to fill a position with them, whether temporary or permanent, regardless of any genuine contract between the sponsor and any employment agency or third party who supplies workers to an organisation
- contracted to undertake an ongoing routine role or to provide an ongoing routine service for the third party, regardless of the length of any genuine contract between the sponsoring organisation and another organisation
If the migrant is self-employed there must be a genuine contract for employment/services between the sponsor and the migrant.
This contract must show:
- the names and signatures of all involved (normally, the sponsor and the migrant)
- the start and end dates of the contract
- details of the job, or piece of work the migrant has been contracted to do
- an indication of how much the migrant will be paid
Where the Home Office believes the sponsor is supplying a migrant to another organisation as labour, they may ask for confirmation from the other organisation, that:
- the migrant works independently from the other organisation, and the sponsor has full control over all their duties, functions, outputs or outcomes
- the migrant is not being supplied to them to undertake a routine role.
Employment agencies and employment businesses
An employment agency, can only apply for a sponsor licence to sponsor migrant workers who will be directly employed by the agency and will undertake duties concerned with the running of the business. The employment agency is not permitted to outsource sponsored workers.
An IT company cannot sponsor migrant workers, only to then supply them as short-term labour to another organisation (body shopping), regardless of any genuine contractual arrangement between the parties involved.
Body shopping is permitted if the organisation does not hold a sponsor licence. This means an employment agency, or an IT company, can supply employees as short term labour to other organisations as long as the employees are not sponsored workers.
Meeting the requirements of a sponsor licence
When outsourcing migrant workers, as part of a service agreement, the service provider must continue to comply with its sponsorship duties such as reporting changes in the worker’s circumstances. This includes changes in work location; change in core duties; a promotion; increase or decrease in salary; recording and reporting any unauthorised absences. This is to ensure the migrant continues to meet the skills and salary threshold required for sponsorship as reflected in the Certificate of Sponsorship (CoS).
Sponsors are also required to report any migrant activities which indicate that sponsorship can no longer continue, for instance when the work is completed earlier than that shown on their CoS.
If your business is involved in outsourcing migrant / sponsored workers, non-compliance can lead to civil or criminal penalties, loss of sponsorship licence, removal of work sponsored employees and criminal charges for senior business leaders and board members.
If your business is involved in outsourcing migrant / sponsored workers and you need advice on how to stay compliant or you don’t hold a sponsor licence but may need one to sponsor new arrivals from the EU from 2021, Migrate UK offers free initial advice.
Contact us on 01235 841 568 or email@example.com