As the Home Office has increased the amount of data they share with HMRC, these emails are likely to continue to increase and it is important a business understands how to respond to them.
Why are these requests for information increasing?
The Home Office is committed to making sure that businesses with sponsor licences are paying their overseas workers appropriately and taking action where this is not the case. This follows some high-profile cases where rogue employers have sponsored people to come to the UK and then not provided them with work.
To help with this, the Home Office introduced new Immigration Rules in April allowing them to:
- Assess salary compliance over a shorter period than previously. They now assess salaries over a 3-month period if the person is working regular hours or 17 weeks if they work irregular shift patterns.
- Check that every hour of work is paid at the correct rate during a pay period.
These rules are designed to catch non-compliance earlier and prevent exploitation of workers, but in many cases they are catching situations where a business is not up to date with reporting obligations to the Home Office.
What to do if you receive an email from the Home Office?
There is no doubt that these emails lead to a great deal of stress and worry for employers. They make clear that if a business has breached its obligations it will lose its sponsor licence and usually provide a short period of 4 weeks to provide a detailed response.
A particular issue with the emails is that they rarely seem to identify the employees the Home Office suspects are being underpaid and instead ask for details of all sponsored workers. Where a business sponsors a large number of workers, this means responding to the request can take some time.
We have helped a number of businesses respond to the requests, and here are our top tips to help you keep your sponsor licence:
- Don't panic! This is easier said than done, but in many cases there is an innocent explanation for the alleged underpayment. The Home Office only provides one opportunity to respond, so a panicked response may miss something and it is better to use all of the time provided to you to prepare a detailed response.
- Start with the Certificates of Sponsorship and wage slips. The Home Office is looking for evidence that someone's gross salary has reduced below the level on their Certificate of Sponsorship, so start by looking at what they should be paid and what they are being paid. This will help identify any potential cases which have triggered the Home Office request.
- Look for missed reports. In the vast majority of the cases we have seen, the trigger for the Home Office allegation is a missed report on the Sponsor Management System. Sometimes, an employee's salary reduces for a permitted reason such as:
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- Maternity or paternity leave
- Long-term sick leave
- Unpaid leave
Each of these reductions should be reported to the Home Office, but if you don't do so it will lead to a discrepancy and a Home Office email.
Other reasons we've seen for audits have been not adding a new PAYE number to the Home Office system or failing to report that a visa holder has left their role. When we are instructed, the first step is always to look for any cases where a report has been missed and then look to correct it.
- Take the opportunity to look for other errors or issues that need to be explained to the Home Office. Often when we review the paperwork before it goes to the Home Office, we find other issues unrelated to pay, such as a change in job title or location, which has not been reported. The Home Office will review the paperwork carefully so it is best to address these in your response.
- Get help. The Sponsor Guidance is long and spread across multiple documents so it is easy to overlook a compliance obligation. Our specialist team can help make sure you have addressed everything in your response. We can also help when something looks to have gone wrong. We have had a great deal of success helping businesses fix flawed processes and making submissions to the Home Office to allow them to keep their sponsor licence.
- Be prepared. With the increase in digital compliance action such as these requests, the best defence is to be as prepared as possible. Carrying out your own audit can help you identify issues and correct them before the Home Office compliance team looks to take action against you.
Whether you have received an email from the Home Office or want to be prepared and avoid the stress of having to prepare a detailed response at short notice, our specialist team can help, so please get in touch. You can also keep up to date with your obligations by subscribing to our business immigration bulletin and our Immigration for Employers podcast series.
