In the second of our three-part series on sponsor licence compliance, we look at the changes employers must report to the Home Office, the deadlines involved and how to avoid common reporting mistakes.
Reporting changes to the Home Office is a fundamental part of maintaining a sponsor licence.
Even where a sponsored worker’s employment is otherwise compliant, failing to report a relevant change on time can create a sponsor compliance issue. During a Home Office compliance assessment, the information recorded on the Sponsorship Management System (SMS) may be compared against the organisation’s actual employment practices and records.
As a general rule worker-related changes often need to be reported within 10 working days while significant organisational changes usually need to be reported within 20 working days.
However, not every reporting obligation follows these standard deadlines. Sponsors should therefore consider the applicable reporting requirement as soon as a change occurs.
Sponsor Licence Reporting Deadlines at a Glance
| Reporting obligation | Typical reporting period |
|---|---|
| Sponsored worker does not start within the permitted period | Within 10 working days of the relevant reporting trigger |
| Unauthorised absence exceeding 10 consecutive working days | Within 10 working days after the relevant trigger |
| Reportable unpaid leave or reduced pay | Within 10 working days |
| Reportable salary change | Within 10 working days |
| Reportable change to job title or duties | Within 10 working days |
| Change to a sponsored worker’s normal work location | Within 10 working days |
| Sponsored worker leaves or sponsorship ends | Within 10 working days |
| Changes to relevant sponsor details | Generally within 20 working days |
| Merger, takeover, de-merger or relevant ownership change | Generally within 20 working days |
| Change to organisation size or charitable status | Generally within 20 working days |
| Relevant regulatory registration or accreditation changes | Generally within 20 working days |
| Relevant insolvency or cessation of trading | Generally within 20 working days, depending on the circumstances |
| Certain Key Personnel changes | Specific rules apply |
| Known or suspected breach of immigration conditions | As soon as reasonably practicable |
Important: These are headline deadlines. The precise reporting requirement and when the reporting period begins, will depend on the circumstances. Sponsors should not assume that every change falls within a standard 10 or 20-working-day period.
What Must Be Reported Within 10 Working Days?
The 10-working-day reporting requirements primarily concern changes affecting sponsored workers.
Worker Does Not Start Employment or Leaves Their Sponsored Role
Sponsored workers are generally expected to start employment within the permitted period under the sponsor guidance.
Where a worker does not start within that period, the sponsor may need to report the delayed start and provide an explanation or stop sponsoring the worker if they will no longer take up the position.
The Home Office will also generally need to be notified where sponsorship ends, including where a worker resigns, is dismissed, made redundant or leaves before the end date on their Certificate of Sponsorship (CoS). This also applies where a worker obtains immigration status that means sponsorship is no longer required.
Employers should accurately record the reason and date sponsorship ended.
Unauthorised Absence, Unpaid Leave and Reduced Pay
Where a sponsored worker is absent without permission for more than 10 consecutive working days, a reporting obligation can arise.
Extended periods of unpaid leave or reduced pay can also trigger reporting obligations and, depending on the circumstances, affect whether sponsorship can continue.
Exceptions can apply to certain permitted absences. Sponsors should therefore consider both whether an absence is permitted and whether it must nevertheless be reported.
Employers therefore need effective systems for monitoring attendance, absences and payroll.
Changes to Salary, Job Title or Duties or Work Location
Changes to a sponsored worker’s salary or employment arrangements can require reporting, particularly where salary is reduced from the amount stated on the Certificate of Sponsorship (CoS).
Changes to a worker’s job title or duties may also require action.
Importantly, an SMS notification does not necessarily allow a worker to move into a completely different role. A material change, including one requiring a different occupation code, may require a new CoS and immigration application.
Employers should also consider whether changes to a sponsored worker’s normal work location need to be reported, for example where the worker moves to a different office, branch or regular client site.
Routine hybrid working does not necessarily require reporting. However, a change to the worker’s main work location or a move to a fully remote contractual arrangement may require further consideration.
Proposed changes should therefore be reviewed before they are implemented.
What Must Be Reported Within 20 Working Days?
The 20-working-day reporting requirements generally concern changes to the sponsoring organisation itself.
Changes to the Organisation
Employers may need to report changes to their organisation’s name, main address, relevant contact details, branches, sites or business activities.
Changes involving organisation size, charitable status, regulatory registration, licensing or accreditation may also need to be reported, as well as relevant insolvency proceedings or cessation of trading.
These changes can affect an organisation’s continuing eligibility or ability to sponsor workers.
Accurate information is particularly important because the Home Office may rely on these records when assessing the sponsor’s compliance.
Changes in Ownership or Corporate Structure
Mergers, takeovers, de-mergers and other ownership changes require particular care.
A sponsor licence belongs to the legal entity to which it was granted. It should not be assumed that the licence will automatically transfer following a corporate transaction.
A new sponsor licence application may be necessary depending on the circumstances.
Where sponsored workers transfer between businesses, including certain TUPE situations, the sponsorship implications should ideally be considered before the transaction completes.
How Do Sponsors Report Changes?
Most reports are made through the Sponsorship Management System (SMS) by an appropriately authorised user.
When making a report, sponsors should:
- provide accurate information;
- record the relevant dates;
- explain the circumstances where required;
- retain supporting evidence; and
- keep evidence that the report was submitted.
Maintaining a clear audit trail is important if the Home Office subsequently reviews the sponsor’s compliance history.
What Happens If a Sponsor Reporting Deadline Is Missed?
Missing a reporting deadline can amount to a breach of sponsor duties.
Depending on the circumstances, potential consequences can include:
- restrictions on sponsoring additional workers;
- downgrading of the sponsor licence;
- suspension; or
- revocation.
A late report will not necessarily result in serious enforcement action. However, repeated failures, inaccurate reporting or inadequate compliance systems can increase the risk to the licence.
Where a sponsor identifies an overdue report, it should consider the appropriate notification promptly, maintain an accurate record of what happened and investigate why the deadline was missed.
How Can Employers Avoid Missing Reporting Deadlines?
Effective sponsor compliance requires good communication between HR, payroll, recruitment, operational management and those responsible for the sponsor licence.
Employers should:
Maintain a Sponsorship Register
Keep a central record of each sponsored worker’s CoS, immigration status, salary, job title, work location and relevant reporting history.
Create Internal Reporting Procedures
Managers should understand which changes must be escalated to those responsible for the sponsor licence.
The person managing the SMS cannot report a change they do not know has happened.
Monitor Payroll and Absence
Salary, payroll and absence records should be monitored for changes that could trigger reporting obligations.
Promotions, salary changes, relocations, restructures and significant changes in duties should be reviewed from a sponsorship perspective before implementation.
Conduct Regular Sponsor Compliance Audits
Sponsors should periodically compare their SMS and CoS records against actual employment contracts, job descriptions, payroll information, absence records and work locations.
Frequently Asked Questions
Does Every Salary Increase Need to Be Reported?
No. Salary increases do not ordinarily require reporting, although exceptions can apply. Salary reductions require greater care and should be reviewed before implementation.
Does Hybrid Working Need to Be Reported?
Not necessarily. Routine hybrid working does not automatically require an SMS notification, but changes to the worker’s main work location or fully remote working arrangements may require consideration.
Does Annual Leave Need to Be Reported?
Ordinary authorised annual leave does not generally require an SMS report. Sponsors must nevertheless maintain appropriate absence records.
Can an Employer Make a Late SMS Report?
Where an overdue reporting obligation is identified, the employer should consider making the appropriate notification promptly and retain a record explaining the circumstances. A late notification does not necessarily remove the original compliance issue.
Who Is Responsible for Sponsor Licence Reporting?
The sponsoring organisation remains ultimately responsible for compliance.
A Level 1 User, solicitor or immigration adviser can assist with SMS reporting, but appointing someone else to manage the process does not remove the sponsor’s responsibility. Employers should also ensure that their authorised users have the appropriate access under the Home Office’s SMS user guidance
How Ison Harrison Can Help
Meeting sponsor licence reporting deadlines is an important part of maintaining compliance with Home Office requirements. Employers need to understand which changes must be reported, ensure that relevant information is communicated internally and keep accurate records of notifications.
At Ison Harrison, our immigration solicitors assist employers with sponsor licence compliance reviews, SMS reporting and sponsor notifications, salary and role changes, corporate restructures, historic reporting issues and ongoing compliance support.
If you have concerns about your reporting obligations or have identified a potential compliance issue, contact our business immigration team for advice.
