Attention Employers: Important Update on the Immigration System

Exciting changes are on the horizon for the UK government's immigration system in 2024! As part of their plan to restrict net migration and crack down on abuse, the maximum civil penalty for employing an illegal worker will be increasing significantly. Say goodbye to the previous £20,000 penalty and welcome the new £60,000 penalty per illegal worker identified.

Now, you might be wondering when this change will come into effect. Mark your calendars for February 2024 or later, as that is when the increased penalty will be implemented. To ensure your business stays in the clear, we strongly advise complying with the Home Office guidance. By doing so, you will avoid penalties and any potential sponsor compliance action.

Let us work together to create a fair and compliant workforce. Stay tuned for more updates and guidance on navigating the evolving immigration landscape.

Intensified Sponsor Compliance

Between 2022 and 2023, the Home Office increased its efforts to check that sponsors were complying with their responsibilities. This was after a break in activity during the height of the pandemic. It is anticipated that this trend will continue in 2024, especially for sponsors in the care sector. The Home Office is also continuing to crack down on illegal working.

All sponsors who employ workers must be aware of their sponsorship duties and should ensure that their HR systems and practices are strong. The risk of non-compliance can increase during periods of economic downturn. As sponsors restructure their businesses, they may make changes to the roles of sponsored workers or make workers redundant.

It may be helpful for sponsors to consider taking sponsor licence refresher training or to undergo a mock audit. This will limit the risk of having their licence suspended or revoked. Significant restrictions on use of the Skilled Worker route

On December 4th, 2023, the UK Government revealed a five-point plan aimed at reducing net migration, which has been high in recent times. Many of the proposed reforms will limit the use of the Skilled Worker route. The Government expects that this plan will complement previous restrictions on Student dependants, as well as increases in application fees and immigration health surcharges. The overall projected drop in net migration is estimated to be around 300,000 individuals for the upcoming year.

On December 21st, 2023, the government released a factsheet that confirmed more details regarding the policy, alongside a document that estimated its immigration impacts. For an in-depth analysis of these documents, please refer to our article here. Among other things, the factsheet confirmed that there will be transitional arrangements to mitigate the changes' impact on Skilled Workers who are already on the route by the time the Immigration Rules are modified in April 2024. Additionally, a more detailed policy statement will be released in due course.

Please find below a table that summarizes the confirmed changes to the Skilled Worker route that will take effect in 2024.

The new salary threshold will make it tough for some medium-skilled occupations. Employers should review the Skilled Worker sponsorship pipeline and analyse median salaries to take prompt action. The Immigration Health Surcharge increase can be avoided with prompt action.

Immigration Health Surcharge increase

The Immigration Health Surcharge will increase shortly. The draft order for this allows for changes to come into effect from the earlier of 16 January 2024 or 21 days after it is made. The order is currently still in the process of being approved by Parliament so will not be in effect until at least February, giving applicants a small further window of time to make applications ahead of the rise. Whether to apply before the rise will depend on a range of factors including the following:

• Whether the applicant is exempt from paying the charge (in which case there is no need to apply earlier);
• The availability of a certificate of sponsorship (for sponsored work routes).
• The start date of a sponsored role, which must not be more than three months after the date of application; and
• How the timing of an application may impact on the expiry date of the permission granted, and therefore whether the holder will have sufficient permission to apply for settlement if desired or will have to apply for a further extension – in this case a calculation would need to be made to determine the likely timelines for application processing and what is the least costly process.

The new yearly rate depends on the immigration category the applicant is applying under.

• For all other relevant immigration categories, including Skilled Workers, the fees will jump from £624 to £1,035.

Since immigration application fees were increased in October last year, the overall application cost for a five-year Skilled Worker visa, without dependants, is currently in the region of £10,000. The cost will climb to almost £12,000 when the Immigration Health Surcharge increase becomes effective.

Immigration expenses are high, and sponsors should be careful not to pass on the Immigration Skills Charge to sponsored workers.

It is advised that sponsors seek advice on recouping other immigration-related costs through a repayment scheme or a clawback agreement to ensure compliance with sponsorship requirements and employment laws.

New IT services for sponsors

The Home Office is in the process of replacing the Sponsor Management System (SMS) with new services for sponsors. Some of these were due to roll out as part of the Home Office’s sponsorship roadmap during 2023 but have been delayed. No current timeline for implementation is available, however, the services scheduled to be introduced are as follows:

• ‘Sponsor a Visa’ – this will allow visa applicants to access a partly-populated online application form once the details of their role have been approved.
• ‘Manage a Licence’ – sponsors will be able to use this to carry out their sponsor licence reporting functions on a new platform that will replace the SMS; and
• ‘Become a sponsor’ – this will provide a new application process for intending sponsors.

Stay connected with UK Visas for further updates and assistance.

We will be monitoring immigration law developments throughout 2024 and will publish further information once it becomes available.

If you have queries on any of the topics raised in this article or need assistance with a sponsor licence or UK immigration application, please get in touch with our advisors