Employment News

News added on 07.09.2020

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Foreign worker

Do you need a sponsor licence from January 2021?

With less than four months to go until the end of the Brexit transitional period, if you haven’t done so already, you should now be thinking about whether you need to apply for a sponsor licence. When do you need this licence?

EU, EEA and Swiss citizens (and their family members) who are already living in the UK on or before 31 December 2020 can apply for settled or pre-settled status under the EU Settlement Scheme. You will not need a sponsor licence for these workers.

However, those EU, EEA and Swiss citizens (excluding Irish citizens) who arrive in the UK from 1 January 2021 onwards will no longer have free movement rights. From that date, all EU, EEA, Swiss and non-EEA citizens coming to the UK will be subject to the government’s new points-based immigration system. Whilst you could previously avoid the need for a sponsor licence by focusing your recruitment on EU, EEA and Swiss citizens, this will no longer be possible once free movement ends. You will therefore need to secure a sponsor licence from the Home Office from 1 January 2021 if you wish to employ:

  • newly arriving skilled EU, EEA or Swiss citizens, and/or
  • skilled workers from outside the EEA.

As a sponsor, you will then be able to recruit skilled workers from anywhere in the world, but only those who meet the job and salary requirements will be eligible. The Home Office has published an introductory guide for employers to the new points-based immigration system and this explains the route for skilled workers who have a job offer from an approved employer sponsor with a sponsor licence.

As applications for a sponsor licence can currently take up to eight weeks to determine, you should therefore consider applying online for a licence now, particularly as the number of employer applications is likely to increase as we approach year end and this could result in further delays. The current fee is £536 for small sponsors and £1,476 for medium or large sponsors. If your application is successful, you will be given a licence rating and your licence will be valid for four years, provided you continue to meet your responsibilities as a sponsor. You will also need to pay a fee (currently £199) for each certificate of sponsorship that you assign to each foreign worker you employ, and you will need to pay the Immigration Skills Charge for each such worker, which is based on how long they will work for you, using the start and end dates on their certificate of sponsorship (currently £364 per year for small sponsors and £1,000 per year for medium or large sponsors, with the full charge being payable in one go). You must not pass on any of these fees to the foreign worker.

You must have a Home Office sponsor licence if you want to recruit anyone from outside the UK from 1 January 2021. This includes hiring newly arriving EU, EEA or Swiss citizens, but it doesn’t include hiring those who have settled or pre-settled status under the EU Settlement Scheme. If you don’t obtain a sponsor licence in time to ensure that your 2021 recruitment needs are met, it could potentially result in some disruption to your business.

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