The Home Office has the power to undertake inspections of those companies and organisations which:
- hold sponsor licences;
- are applying for sponsor licences; and/or
- allow sponsored migrants to work on their premises even if they do not themselves hold a sponsor licence.
These audits can be unannounced, although the Home Office usually gives around a week’s warning. A failed audit can lead to the application for a sponsor licence being refused or a current sponsor licence being suspended and/or revoked. In the latter situation, the sponsor licence holder would not be able to sponsor new migrant workers and, if the licence is revoked, current sponsored workers will have their visas cancelled.
Home Office audits are a powerful tool to prevent abuse or mishandling of the sponsor licence. They can be random or as a result of specific intelligence so the visits themselves can be very detailed, intrusive and time consuming. In addition, if a sponsor licence holder is not prepared for a visit, it may result in the Home Office requesting further documentation and information to be provided after the visit has taken place within quite a short timesecale. This, again, can be time consuming to put together, especially if the documents asked for are not readily available or do not exist.
Visits can be particularly concerning for the company’s Authorising Officer, who is the person tasked with and responsible for overseeing the company’s sponsor licence compliance.
This note provides an overview on what to expect when the Home Office visits, how to prepare for such a visit and practical steps to take to ensure that sponsors are audit ready.
A sponsor licence is granted by the Home Office on condition that a number of compliance duties can be and continue to be met. The purpose of the audit is to satisfy the Home Office that the licence holder can meet or has met these duties.
There are five key areas of compliance.
- Monitoring immigration status – all employers, whether sponsor licence holders or not, should be checking and retaining evidence that each employee has the appropriate immigration permission to undertake their particular role and tracking the expiry dates of any employees with time limited immigration permission.
- Maintaining contact details – current and past contact details of sponsored migrants must be recorded.
- Record-keeping – each sponsored worker should have a file (electronic or hardcopy) which contains evidence that they are eligible for sponsorship (such as a CV, degree certificate and/registration certificate) plus payslips, a contract of employment and evidence that a compliant Resident Labour Market Test was undertaken, where one was required.
- Migrant tracking and monitoring – each sponsored worker’s absences and annual leave should be recorded. Any changes in their employment circumstances (for example, a change in job role or salary or if they leave the sponsor) should be reported to the Home Office.
- Recruitment and accreditation – copies of any registration and/or professional accreditation documents and/or any confirmation letter the migrant is required to have in order to do their job should be kept on file, for example, where the migrant is a doctor, proof of registration with the General Medical Council.
We recommend that written policies and processes that cover these areas are put in place.
Before the audit
If the Home Office provides advance notice of their intention to audit, they will usually contact the Authorising Officer in the first instance. They will let the Authorising Officer know when and where they intend to visit and the names of the inspecting officers. They will often provide a list of the sponsored workers who they intend to interview or whose files they would like to audit, though they may not limit themselves to those files on the day.
If the time and place is not suitable for any reason, for example the files or key personnel are located elsewhere, the Home Office will allow for reasonable rearrangement.
If the Home Office makes an unannounced audit, they will usually arrive at the registered office address listed on the Sponsor Management System (SMS) and ask for the Authorising Officer by name.
It is very important that reception staff are trained on how to react to an unannounced audit and know how to contact the Authorising Officer or a similarly senior and knowledgeable person should the Authorising Officer not be available. There have been instances where the Home Office has revoked a licence solely on the basis that no one was available to meet with the inspecting officers and the reception staff were unsure whom to contact. These misunderstandings are easily avoided with training.
Where no one suitable is available, the Home Office will normally arrange a return visit on a more convenient day.
Top tip – it is vital that any changes to the Authorising Officer or registered address are promptly reported. If the Home Office receives an e-mail bounceback from the Authorising Officer’s email address because they have left the company, this could mean an automatic revocation. This could also happen if the sponsor has moved office without updating the sponsor licence and the Home Office turns up at the previous office address.
What to expect on the day
Home Office inspecting officers will normally be in uniform similar to those worn by Immigration Officers at the border. They will ask the Authorising Officer to sign a document consenting to the visit.
The audit is split into two parts: interviews and file review.
The Authorising Officer will always be asked to attend an interview. They may be accompanied by another employee who has more expert knowledge on the process and policies associated with the sponsor licence. It is vital that the Home Office interviews someone who is fully aware of the organisation’s policies and processes regarding the company’s compliance with its sponsor licence duties and responsibilities to give them maximum confidence.
The interview will focus on the company’s knowledge of its sponsor licence duties (the five areas of compliance listed above plus general sponsor duties) and the policies in place to comply with them. In particular, the Home Office will want to know:
- how the company recruits migrants;
- whether it knows how to complete a compliant Resident Labour Market Test;
- how the company ensures that it is only issuing Certificates of Sponsorship to eligible migrants;
- how the company monitors and reports migrant and company changes of circumstances; and
- how the company keeps records.
NB - A critical area is the company’s prevention of illegal working policy, that is how it checks and retains evidence of each employee’s right to work and tracks visa expiry dates.
Where available, written policies should be printed and provided to the Home Office. If they are not codified before the visit, it is highly recommended that they are written down and reviewed by an immigration adviser prior to the visit.
Sponsored migrants may also be interviewed and asked to confirm their job title, description, place of work, salary and allowances, as well as the recruitment process undertaken to hire them. The Home Office will check each answer against the information declared on the Certificate of Sponsorship and any subsequent SMS updates. If there are discrepancies, the Home Office will note these on its report. If there are serious discrepancies or a large number which indicates a pattern of non-compliance, the Home Office may take action against the company.
Top tip – be sure to request a copy of the hand-written interview notes made by the official, which should be provided to the company at the end of the visit.
The Home Office will undertake a file review to check the company’s record keeping compliance and to confirm that the data on each Certificate of Sponsorship and on the SMS in general, is accurate.
They will sometimes provide a list of sponsored migrants which they intend to review to give the sponsor an opportunity to prepare. However, they reserve the right to review any personnel files including those of non-sponsored workers. Migrants who hold Tier 4 (General) student visas often come under particular scrutiny (more below).
The documents that each employee should have on file are listed at Appendix D of the Tier 2 and 5 Sponsor Licence guidance.
A key document will be the right to work check. This should be a signed and dated copy of the passport ID page and UK immigration permission document (either a copy of the page in the passport containing the relevant visa stamp or a copy of both sides of the employee’s Biometric Residence Permit).
Other documents/information which must also be held on file are standard to HR files such as contact details, payroll, NI number, record of absences, job title and description, CV and qualifications, and the employment contract or contract for services.
Tier 4 (General) visa holders often face particular scrutiny and the company will be expected to show that the migrant is working no more than the maximum hours per week permitted by their immigration status as stated on their visa or Biometric Residence Permit. If they are working full time because they are outside of term time, the company must have a letter from the migrant’s Higher Education Institution confirming their term dates.
The Home Office will appreciate that documents may not all be in the same place (payroll for instance is often kept separately). It is a good idea for those employees that the Home Office wishes to review, to print off all the information which they are required to retain to comply with their sponsor licence duties and responsibilities so that they are readily available for inspection.
Where some documents appear to be missing or are not available for review on the day, the Home Office will usually give the company an opportunity to e-mail this additional documentation after the visit.
Tips to make the day go smoothly
- Relax – the vast majority of sponsor licence holders reach the standard of compliance expected by the Home Office. Very few sponsor licence holders are perfect and there will always be room for improvement. Unless they are operating on intelligence to the contrary (for example, the company has recently been issued civil penalties for employing illegal workers), the Home Office will not be seeking reasons to revoke the company’s licence. For most sponsors, they will simply be checking the company’s records and making recommendations for improvement; so there is no need to feel under pressure or be defensive.
- Be co-operative – comply with all reasonable requests in a friendly and timely manner. Most Home Office audits last no more than a day and sometimes a few hours if the company has its records organised. A room should be made available with sufficient space to review files and interview sponsored workers. Do not be afraid to offer them refreshments. However, it is likely that they will cautiously refuse anything more than a cup of tea and a biscuit due to bribery concerns.
- Be prepared – if the Home Office gives advance notice of the workers they wish to file review or interview, it is always appreciated if hardcopy files are produced. If documents are not printed out, it is important to ensure that someone is available who is familiar with the electronic records and can sit with the inspecting officer to show documents as requested.
- Review files – check that the SMS is up to date and all reporting requirements have been met. If an update to a work location or a salary increase has not been made, make the update(s) as soon as possible. A late update is preferable to no update.
- Warn clients – third parties may also be visited where a company has declared that a sponsored worker is working at a client site under a contract for services. It is important that the client is aware of the possibility of an unannounced Home Office visit and companies may wish to consider working with them to put a process in place.
- Seek legal advice – a legal representative can assist in preparing for the visit and be present on the day to ensure that the visit is undertaken in line with the Home Office’s own guidance. The inspecting officer may not permit the immigration adviser to answer questions in relation to the company’s compliance with its sponsor licence duties and responsibilities but the presence of an adviser will often act as reassurance to the Home Office that professional advice has been sought to ensure compliance.
After the audit
After the Home Office has visited, it is important to ensure that any additional documents requested are sent in good time and any missing SMS updates identified on the day are made.
The Home Office will prepare their report and send it to the Authorising Officer by e-mail. They will report on each of the five areas of compliance and note any concerns or areas where improvements can be made. One of four outcomes may occur.
- A-Rating maintained – the Home Office was content that the company’s compliance obligations were being met. There may be areas where the process or policy could be improved and recommendations will be made in the report. Minor compliance breaches in isolation, such as a late SMS update, will not normally cause the organisation to fail an audit.
- Downgrade to B-Rating – the Home Office was not content that compliance obligations were being met sufficiently and multiple concerns were raised about the conduct of the licence. A B-Rating means that Certificates of Sponsorship can no longer be issued, though existing sponsored workers can continue working as before. The Home Office will place the organisation onto a time limited sponsorship action plan where they will monitor improvements with a view to restoring an A-Rating if sufficient progress is made, or revoking the licence if it is not.
- Suspension - the Home Office has serious concerns about the organisation’s ability to meet their compliance obligations and has identified significant or systemic failings, regardless of the honest intent of the organisation. A detailed letter will be provided setting out the areas where the company has failed to comply with its sponsor licence duties and responsibilities. Current sponsored workers can continue to work but no new Certificates of Sponsorship can be issued.The company will be given time to submit representations addressing each of the alleged compliance breaches, either explaining why they happened and what measures have been put in place to ensure they do not recur or providing evidence that the alleged compliance breaches have not taken place. If the Home Office accepts that the representations demonstrate that the company is not a threat to immigration control, it should reinstate the licence. If representations are not submitted or adequate, the Home Office will revoke the licence.
- Revocation – the organisation is considered to be a serious threat to immigration control for example, through dishonest dealings or involvement in criminal activity. Upon revocation, all current sponsored migrants will have their immigration permission curtailed.
If the company wished to challenge the revocation, there is no right of appeal and, unless an agreement can be reached with the Home Office to restore the licence, the only option is to request a Judicial Review of the decision in the High Court. Since such Judicial Reviews have rarely been successful, we would strongly advise that, if an employer has their licence suspended, they immediately engage legal advisers to prepare a response to the Home Office.
How to be audit ready
Aside from putting in place and regularly reviewing policies and processes, a mock audit is an excellent way to test a company’s ability to pass an official audit. Macfarlanes can conduct an audit to match those undertaken by the Home Office. We will provide a report which provides our view on whether the company is likely to pass the audit and has recommendations on changes to policies and processes.