Home Office Concerns About Skilled Worker Pay: How Sponsors Should Respond
Key takeaways
- Home Office enquiries often arise where payroll data does not match information held under the sponsor licence.
- Employers should compare Certificates of Sponsorship, payslips, and Sponsor Management System records before responding.
- Permitted salary reductions may still cause concern if the relevant change was not reported.
- A complete response should address both the alleged underpayment and any related reporting errors.
- Regular compliance checks can help sponsors correct issues before the Home Office takes action.
Introduction
Businesses with sponsor licences are increasingly receiving emails from the Home Office suggesting that sponsored workers may be underpaid. These messages may also warn that the sponsor licence is at risk.
As more information is shared between the Home Office and HM Revenue and Customs, discrepancies between sponsorship records and payroll data are more likely to be identified. Employers should therefore know how to review the issue and prepare an accurate response.
Why are these enquiries becoming more common?
The Home Office is responsible for checking that licensed sponsors pay overseas workers in accordance with the Skilled Worker rules. This follows cases in which employers sponsored workers but failed to provide the promised work or salary.
Changes introduced in April allow the Home Office to assess salary compliance over shorter periods. It may now:
- Review pay over three months for workers with regular hours.
- Assess pay over 17 weeks for a worker who works irregular shifts.
- Check that every hour worked during a pay period was paid at the required rate.
These measures are intended to identify non-compliance earlier. However, some enquiries arise not because a worker was unlawfully underpaid, but because the sponsor failed to report a permitted salary reduction or another relevant change.
What should an employer do after receiving an email?
The correspondence should be taken seriously. It may state that a breach could lead to the loss of the sponsor licence and may allow only four weeks for a detailed reply.
The Home Office does not always identify the worker whose pay has caused concern. It may instead request information about all sponsored employees. For organisations with several sponsored workers, collecting and checking the documents can therefore take time.
The employer should begin the review promptly, but avoid sending a rushed response. There may be a reasonable explanation for the apparent discrepancy, and the Home Office may provide only one opportunity to respond.
Compare Certificates of Sponsorship with payroll records
The first step is to compare the salary stated on each Certificate of Sponsorship with the amount actually paid.
The employer should review:
- gross salary and working hours recorded on the Certificate of Sponsorship;
- employment contracts and any amendments;
- payslips for the relevant period;
- payroll and PAYE records; and
- records of absence, reduced hours or unpaid leave.
This review should help identify which worker or pay period may have triggered the enquiry and whether the salary fell below the required level.
Check for missing Sponsor Management System reports
A missed report is a common cause of a difference between Home Office and payroll records.
A worker’s salary may be reduced for a permitted reason, including:
- maternity or paternity leave;
- long-term sick leave; or
- unpaid leave.
Even where the reduction is allowed, the sponsor may still need to report it. If no report was made, the payroll figures may appear inconsistent with the Certificate of Sponsorship.
Other errors may include failing to add a new PAYE reference or failing to report that a sponsored worker has left their role. The employer should identify any missing reports, correct the record where possible and explain the circumstances in the response.
Review the records for other compliance issues
The Home Office may examine all documents provided, not only the salary information. The employer should therefore check for other unreported changes, such as a new job title, different duties, a change of work location or altered working hours.
Any additional issues should be addressed clearly. It is generally better to explain an error and the action taken to correct it than to leave the Home Office to identify an unexplained inconsistency.
Prepare a complete response
The response should explain whether each worker received the required salary, why any reduction occurred, whether it was permitted and whether it was reported.
It should also include relevant supporting documents and describe any corrective measures introduced. The explanation must be consistent with payroll records, employment documents and information held on the Sponsor Management System.
Consider specialist assistance
Sponsor duties are set out across several guidance documents, and it can be easy to overlook a reporting requirement. Employers can consult the Home Office’s official sponsorship information for employers and educators for guidance on sponsor duties, reporting obligations and compliance procedures.
Legal advice may be appropriate where several workers are affected, where the records contain multiple errors or where the Home Office has warned that the sponsor licence may be revoked. A specialist can assist with reviewing the evidence, identifying missed reports and preparing the response.
Carry out regular compliance checks
The increased use of digital records means that the Home Office can identify discrepancies without first conducting an on-site visit.
Regular internal audits can help employers compare payroll data, Certificates of Sponsorship, and Sponsor Management System reports. This allows reporting or record-keeping issues to be corrected before they lead to formal compliance action.
