In the bustling world of UK hospitality, finding and retaining skilled staff is a constant challenge. A sponsor licence can offer a helping hand for hospitality businesses, enabling them to tap into international talent and maintain their competitive edge.
So, what is a sponsor licence?
A sponsor licence is issued by the Home Office and allows employers to sponsor international staff. The employer applies for a sponsor licence and, provided the licence is approved, they will be issued with an A-rated licence. Without this licence, employers cannot legally employ non-UK resident workers under sponsored visa work routes. Once the employer has an A-rated licence, their business will be listed in the UK Government Register of Sponsors, and they can start assigning Certificates of Sponsorship (CoS) to prospective employees. The prospective employee can then use the CoS to apply for a Skilled Worker visa.
How much is this going to cost me as an employer?
Many employers come with a preconception that investing in a sponsor licence will cost a great deal of time and money. However, it is not as much as some might think. Applying for a sponsor licence costs a one-off fee of £536 for most small businesses and £1,476 for medium and large businesses. An employer is usually categorised as ‘small’ if they have at least 2 of the following: an annual turnover of £10.2 million or less; total assets worth £5.1 million or less; and 50 or fewer employees.
In addition to this licence fee, there is a charge of £239 to assign each CoS and an Immigration Skills Charge, which starts at a reduced rate of £364 per year for small sponsors and charities and increases to £1,000 per year per worker sponsored as a Skilled Worker.
There are also visa application fees and a levy to use the National Health Service. Unlike the charge for the CoS and the Immigration Skills Charge, these fees can be subsidised by the employer or paid for entirely by the employee, with practice varying widely across different businesses and sectors.
What roles can be sponsored and what are the salary requirement?
There are a range of hospitality sector roles which can currently be sponsored, including but not limited to: chefs (all levels), bar managers, catering managers, floor managers (restaurant) hotel managers, and spa managers.
The minimum salary threshold for new applicants under the Skilled Worker visa route is £38,700 per year (which equates to £19.85 per hour), or the going rate for the role being sponsored, as of 4 April 2024.
There may be lower salary requirements for certain workers. For example, new entrants to the labour market, including students switching to Skilled Worker visas or those under 26 years old, can be paid 70% of the “going rate” for the sponsored role or £30,960 per year (which equates to £15.88 per hour), whichever is higher. New entrants can be sponsored for up to 4 years on this discounted rate. Businesses are prohibited from artificially inflating the salary so that it meets the minimum salary threshold.
Can I sponsor existing employees?
Yes, it is possible for existing employees to apply to change to a Skilled Worker visa if they are already in the UK on a different type of visa (e.g. a Student visa) without them having to leave the UK. This helps support business continuity with the retention of talented staff and prevents unnecessary travel for the employee.
What are the advantages of having a sponsor licence?
Holding a sponsor licence provides numerous advantages for employers as well as employees. One advantage is that employers are able to address the skill gaps which still persist across various UK sectors in the aftermath of Brexit and COVID-19. Furthermore, offering secure employment opportunities to international workers can lead to higher job satisfaction and loyalty, in turn improving retention rates.
On 3 April 2023, the Caterer reported that Italian restaurant group Gusto turned to sponsorship when a shortage of chefs forced Gusto’s Edinburgh restaurant to close on Mondays and Tuesdays during the Fringe Festival in August 2022.
After investing in sponsorship, Gusto used the UK sponsorship scheme to hire chefs from India, Chief executive Matt Snell gave his views on this to the Caterer:-
“Of the 30 chefs we hire we’ve got zero turnover. Every single one is working out and we are starting to see progression. We feel very passionately that it’s been nothing but positive for our business.”
Our clients with sponsor licences have also reported an input of fresh and diverse ideas into the business and the option for sponsored employees to do overtime if required (provided overtime is at the same pay or higher than outlined in the CoS). They tell us it is a helpful tool for recruiting hard-to-fill roles such as chefs and spa managers.
In turn, international employees can benefit from the Skilled Worker visa as it is a route to obtaining permanent residence in the UK if they so wish or, if the employee cannot meet the requirements for ILR, they can continue extending their Skilled Worker visa until they are able to submit a successful ILR application.
Overall, a sponsor licence can significantly enhance an employer’s ability to attract and retain reliable global talent, boost their business’ potential with fresh and innovative ideas, and give them a competitive edge in the hospitality sector.
Are there additional compliance requirements as a sponsor licence holder?
Yes, as a sponsor licence holder you must comply with additional compliance requirements – however, these are not as intrusive as one would expect. Sponsors have reporting duties, such as notifying the Home Office of the sponsored worker not starting the role they have been sponsored for or if you stop sponsoring the worker for any reason, etc; record-keeping duties, as you must keep certain documents for each worker you sponsor; a duty to comply with immigration laws such as Right to Work check rules and sponsor licence guidance; a duty to comply with wider UK law; and a duty not to behave in a manner that is not conducive to the wider public good.
These obligations are placed on sponsors by the Home Office as sponsor licence holders are given significant trust to ensure that the immigration system is not abused. Some of these duties are not exclusive to sponsor licence holders. All UK businesses are required to comply with the Home Office guidance on Right to Work checks and with wider UK law. All businesses should strive to behave in a manner which is conducive to the wider public good and have good HR systems in place.
To find out more about obtaining a sponsor licence, please contact our Immigration Team for advice and support on 03330 430350.
Updates and Events
Keep up to date on Right to Work checks and sponsor licence compliance.
Webinar: Join us for a free webinar on Tuesday 29 October at 09:30, hosted by Legal Director Gurjit Pall. Book your place now.
Round Table: Join us for our upcoming hospitality roundtable event, taking place in person at our office in George Square, Glasgow. Register your interest here.
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