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Tier 2 – For employers without a licence

For a free initial assessment of your potential Sponsor’s Licence application, please click here.

Click here for information on the effects of the current interim limit on Tier 2 of the Points Based System.

Please take a few minutes to read the important information below regarding Sponsor Licensing under Tier 2 of the new Points Based System.

Employers who want to cut past this information and get some relevant and direct advice based on their circumstances, should complete our online form for a free initial assessment, and a service package proposal, or contact us.

Employers who already have a licence, should click here for some more relevant information, or contact us.

Many employers are asking the question; “Why do we need a Sponsor’s Licence?”

As of the 27th November 2008, the work permit arrangements have been replaced by Tier 2 of the new Points Based System. This means that from now on, if a UK employer wishes to:

  • Employ a non-EEA national (without other valid leave)
  • Transfer an employee to the UK from an overseas branch
  • Extend the stay of an existing work permit holder, or
  • Make any significant changes to the role of an existing work permit holder

…the employer must hold a Sponsor’s Licence.

It should be noted that Sponsor’s Licences are issued for 4 years, and the process of obtaining a Sponsor’s Licence will generally take around three months. It therefore makes sense for many employers to obtain the licence in readiness of any of the above events.

The following general points regarding Tier 2 of the Points Based System should also be understood by employers:

  • Under this tier, an individual seeking entry (or leave to remain) as a sponsored skilled worker, needs to score enough “points” in order to qualify. In order to score enough points, the applicant needs to hold a “Certificate of Sponsorship” from their prospective UK employer.
  • This Certificate of Sponsorship (a virtual/online document) can only be issued by employers who have a “Sponsor’s Licence”, and are present on the “register of sponsors”. The actual initial application for a licence is dealt with through a fairly lengthy online process, and this is followed up by the submission of certain documents. Sponsors can register under particular tiers, and subcategories, with different requirements in place to register in each.
  • In order to obtain, and retain, a license, a Sponsor must agree to uphold a number of “Sponsor’s Duties”. The requirements are specific and detailed but broadly they include reporting (promptly to the Border Agency regarding the actions of migrant workers) record-keeping, and compliance and cooperation (with the Border Agency).
  • As well as agreeing to comply with and uphold the general Sponsor’s Duties, by applying for a Sponsor’s Licence, the employer also agrees to adhere to any relevant and current guidance that is released (or may be released in the future) regarding specific situations, and specific occupations, and to be able to demonstrate this at any time in the future.
  • A Border Agency rating system exists. Licensed sponsors are either “A-rated” or “B-rated”. A well established employer with effective systems and procedures for sponsoring migrants should hold an A rating. A B-rating (a transitional rating) is awarded to any employer failing to uphold their “Sponsor’s Duties” (or where the Border Agency believe that another relevant breach of the rules has taken place or is likely). Any sponsor given a “B-rating” is also given an action plan, with a deadline. Failure to adhere to the action plan will lead to the revocation of the license.
  • If a sponsor loses its licence, the impact can be very serious. It will not be able to sponsor any new migrants, and existing migrants will have their leave curtailed (and will ultimately be forcibly removed from the UK, unless they were not complicit in the event leading to the license revocation, and they find a new sponsor within 60 days).
  • In addition to the rating system, and the threat of the removal of licenses, the Government has introduced a series of Civil Penalties (up to £10,000) for employers, as well as a new criminal offence, which carries a prison sentence of up to 2 years, and an unlimited potential fine. The most severe of these penalties are reserved for those employers knowingly employing illegal migrant workers.
  • Sponsors issue Certificates of Sponsorship, using an online interface called the Sponsor Management System (SMS), which has various levels of user authority. It is while issuing Certificates of Sponsorship that many of the same details as those required in a work permit application are provided to the Border Agency. Justification needs to be provided for the employment of the overseas national, along with (in most cases) details of recruitment advertising and an explanation regarding responses. While evidence does not need to be sent to the Border Agency when issuing a CoS, it needs to be available to be presented to the Border Agency on request (which could be at any time while the individual remains sponsored). This is the most important difference between the old and new system, and it is sure to catch out many employers: with the new system, the checks are carried out retrospectively, following the issuing of a CoS.
  • While issuing Certificates of Sponsorship, the employer also needs to follow any guidance that relates to the specific situation or the specific occupation to which the Certificate of Sponsorship relates. Again, the employer is trusted to do this as a licensed sponsor. Compliance is only checked by the Border Agency retrospectively, and failure to comply can lead to a range of punitive measures.
  • When an employer first registers as a sponsor, they need to estimate the number, and the types, of certificates they intend to issue. The requested figure requires justification, and a “quota” of certificates is imposed. A review point will also be set. If, at the review point, or before, the employer needs to increase their quota, a case will also need to be put forward in support of this.
  • As an employer, your dealings with the Border Agency (when not online or in writing) will be through “Account Managers/Compliance Officers”. A primary focus of these new roles will be to identify and investigate indications of illegal working, such as contradictory information provided through the SMS, and poor reporting or record-keeping.
  • You may use a representative, to help you register as a sponsor, to administer the SMS as a “level 1 user” and “key contact”, and to make representations to the Border Agency in the event of any threatened actions, such as downgrading or removal from the register. More importantly, a partner organisation, such as UK Work Permits Ltd, could help prevent any threatened action or unwanted attention in the first instance.

It is important to stress one key difference between the old work permit arrangements and the new Tier 2 of the Points Based System. With the work permit schemes, detailed information and documentary evidence was submitted with an application for a work permit (before it was approved). If the work permit was then refused due to lack of, or failings in, the supporting documents, then this was inconvenient, but the employer knew where they stood. If the application was approved however, the employer could move on, employ the individual, and have no further concerns.

Under the new Tier 2 System, employers have the immediate power to issue Certificates of Sponsorship based on a promise that they will only issue certificates in cases where the individual, the employment, and the general situation meet all relevant and current requirements. However, relevant evidence can and will be requested at any time by Border Agency staff. If the Border Agency take the view that a CoS was issued wrongly, and if they cannot be provided with suitable evidence to prove otherwise, they are able to take punitive action against the employer, including civil penalties, downgrading, or removal from the register. It could be said that under the new system, employers are given “enough rope to hang themselves”. It is therefore essential that all supporting evidence is held safely, in one place, ready for retrieval as and when required.

Under Tier 2 of the new Points Based System, there will be a much heavier emphasis on compliance, record keeping, and reporting, than ever before. The failure of an employer to adhere to the new requirements could have very serious effects on the employer, and on any existing, or future, sponsored migrants. The first step in tier 2 is for the employer to register as a sponsor, but this first step brings an employer into a new, heavily-policed system of immigration control, and in this system the employer’s responsibilities are significant.

Our Services

UK Work Permits Ltd is offering the same expert assistance and guidance in this new area of work-related immigration, as we have always provided to our clients. Our services include the following:

  • Assistance with the task of Sponsor Registration, ensuring wherever possible that an employer is awarded an A-rating from the start, and that they are given the maximum reasonable “quota”. This process includes an an initial compliance audit relating to the employer’s HR systems and procedures.The processes and materials that we use are designed to be as efficient as possible in helping clients ensure that they meet the requirements of the new system. As Border Agency assessed providers, we can also provide a recognised endorsement of our clients HR systems, which will normally speed up their application, and help them avoid a site inspection by the Border Agency.
  • Administration of the Sponsor Management System, on behalf of the employer. This includes keeping accurate records of all issued Certificates, and of all information provided through the SMS to The Border Agency. UK Work Permits Ltd will update all relevant details as we are informed of them, and flag up any mistakes or discrepancies, before these cause any problems with the Border Agency.
  • Administering the issuing of Certificates of Sponsorship on behalf of the Sponsor, in line with the above, general administration of the SMS. This involves checking the situation meets current guidance, making a case for each certificate, and making checks as necessary on the documentary evidence available to confirm a person’s qualifications and/or work experience. It is also necessary for supporting documentation to be collated and kept on file, ready for inspection as and when required by the Border Agency.
  • Important updates and comments (as necessary) provided to clients regarding specific areas of compliance which the Border Agency have identified or focused on.
  • Guidance documents and updates to be issued to all line managers of sponsored staff, or HR Officers to ensure that the right issues are reported to the Border Agency in a timely fashion.
  • Periodic checks on the status of migrants, to ensure, (in case of the failure of a line manager to report something relevant) if any piece of information needs to be updated through the SMS, this takes place swiftly.

If you would like to receive professional and reliable assistance to help your business to gain maximum benefit from the new system, while remaining compliant, UK Work Permits Ltd would be very pleased to assist you.

We are also able to offer services to employers who have already applied to become registered sponsors. Please click here for more information.

Please contact one of our consultants for more information, for a free initial assessment of your requirements, and for details on our fees.


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