A sponsor licence is necessary for UK businesses that require foreign talent since it allows employers to recruit and sponsor non-UK nationals on the Skilled Worker route and other routes in this category. UK Visas and Immigration (UKVI) strictly monitors the sponsors. This is mainly for failure to adhere to the compliance requirements. Penalties include downgrading of a licence. This would deny a company its ability to issue CoS.
Downgrading is a warning given to the business that failed to meet the criteria for sponsorship licence compliance. Still, there’s a chance to put things right before the licence is suspended or withdrawn altogether. The article reveals what downgrading entails, what has to be done to restore the licence to an A-rating, and long-term strategies that ensure that a licence downgrade is not experienced.
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What Is Downgrading Sponsor Licence?
Rating downgrade of a business’s sponsorship licence means UKVI would rate the business B instead of rating it A. The usual rating. The downgrade means UKVI has found a reason not to be compliant with the requirements for a sponsorship licence. The licence might remain valid and effective in permitting the company to continue sponsoring the existing employees; however, the ability to issue new CoS is highly restricted, which is terrible for recruitment progress in the future.
A downgrade would generally follow a UKVI audit that highlighted weaknesses in record-keeping, right-to-work checks, or changes in employment reporting. A B-grade is one that puts a business under closer scrutiny and has to present an improvement plan that will eradicate weaknesses. Non-compliance might attract suspension and even full revocation of the licence in the long run.
Possible Reasons Why Sponsor Licences Are Downgraded
Poor and Incomplete Record-Keeping:
The UKVI businesses are also expected to maintain proper records of sponsored workers, right-to-work documents, contracts of employment, and their salary levels. Weakness in records or their absence means a lack of overall control over compliance and may also result in downgrading.
Right-to-Work Checks Not Conducted Properly:
The employer should also validate all workers, including non-sponsored employees, as legally allowed to work in the UK. Any failure to check due to insufficient or missing information means that the immigration abuse will probably occur and is often the reason for downgrading.
Failure to Report Changes on Time:
A change in a significant shift in the job work or the change of the title of a worker’s job, his salary, or his location of work should be announced to the employers within ten working days from the date of the change. Failure to report such changes via the Sponsor Management System gives rise to a non-compliance issue and UKVI concern.
Abuse of Certificates of Sponsorship (CoS):
Allocating CoS to bogus jobs or to any job not satisfying the skill or salary criteria seriously breaches the criteria for a sponsorship licence. This fraud would tend to deflate the credibility of the whole visa system, and hence, this facilitation of downgrade is quite possible.
Inadequate Internal Systems for Monitoring Sponsored Workers:
In this case, the respective employers should also be watchful and closely examine their sponsored employees on visa expiration, days of absence, and earnings equivalence with the rules while on a visit visa. A broken monitoring system resulting from inadequate follow-up normally results in licence downgrading due to conditions violations.
This video will explain everything you need to know to avoid sponsor licence suspension.
How to Retrieve Your Licence Rating
Companies must operate under a UKVI-prescribed corrective action plan once the rating falls into a B-rating to get the licence back into an A-rating. The corrective action plan is specific, with defined critical areas of improvement and timelines, usually three to six months, on compliance-related issues. Critical stages in resetting the rating include the following:
Pay the Action Plan Fee and Accept the UKVI Monitoring
A fee of £1,476 accompanies the action plan, and the company must formally accept the terms in order to continue. During the corrective period, the business remains under the scrutiny of UKVI, although it is free to sponsor some new workers.
Review HR Processes and Carry Out Internal Audits
They must analyse the HR records and procedures to ensure that they comply with the requirements for the sponsorship licence. Completion of the right-to-work forms, job agreements on CoS-compliant terms, and proper records of the conditions upon which an individual arrives on a visa is part of it.
Retrain Staff Responsible for Sponsorship Duties
All Authorising and Level 1 SMS users will be refresher-trained to ensure that they know what to do. Retraining prevents future breaches of compliance.
Implement New Monitoring and Reporting Systems
Companies should have adequate internal controls to monitor sponsored employees. Automated monitoring tools, for instance, alert the company when visas are close to expiring or a change in employment occurs. Such systems ensure that reports on sponsored employees are submitted on time to UKVI.
Provide Evidence of Compliance to UKVI
Following the development of the remedial action plan, the company should demonstrate that all corrected deficiencies are now present. An upgraded bookkeeping system, changes in policies, and documentation of training on new policies for the workforce can be used as evidence.
Cooperate with Follow-Up Audits
After providing evidence, UKVI may conduct a follow-up audit to ascertain improvements. A successful audit is important in reviving the A-rating and taking the bars off the new CoS issuance.
Consequences of Not Restoring Compliance
UKVI will escalate the issue if the action plan is not satisfactorily completed or if there is further non-compliance. The problem can then result in a suspension or even total revocation of the sponsor’s licence. When the licence is revoked, the firm will be denied the opportunity to work for the sponsored workers on its payroll, and the workers will be given 60 days to change employers or leave the UK.
It would also require the company to submit another application for a new licence after a 12-month cooling-off period, which would greatly interfere with the company’s operations and harm its reputation.
Avoid Future Downgrade or Suspension of Licence Rating
Holding the licence rating status after recovery means there is a need to maintain compliance. Following are some measures that the businesses can take to avoid future penalties:
Conduct Regular Internal Audits: Many audits enhance the discovery of compliance gaps that would otherwise worsen.
Access to the Sponsor Management System: Report all changes in employment promptly and accurately to the agency.
Monitor the Status of All Employees: On the date of expiry of visas, as well as the employee’s absences and changes in employment conditions.
Keep Yourself Informed on Changes in Immigration Law: As a part of your research, you may like to track updates from UKVI and ensure updates in your processes to track the changes in regulations.
Engage Professional Help: An immigration attorney will ensure you receive professional advice when making decisions without risking costly mistakes, keeping your business afloat.
Get Legal Assistance
This situation is considered serious but not irreparable, as a sponsor licence downgrade can be repaired with compliance, restoring the business’s ability to sponsor international workers. However, the lesson learned here will demand more proactive compliance and not getting into this kind of problem again in the future to sustain long-term success. Call A Y & J Solicitors today for professional help with a sponsorship licence or to help you get out of the complexities of downgrading. Our legal experts can help to take you through an action plan, prevent further penalties, and also keep your business within UKVI regulations.
A Y & J Solicitors is a specialist immigration law firm with extensive experience with the requirements of a sponsorship licence. We have an in-depth understanding of immigration law and are professional and results-focused. For assistance with your visa application or any other UK immigration law concerns, please contact us at +44 20 7404 7933. We’re here to help!
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