Sponsor Licence Compliance: Hidden Risks HR Directors Must Manage

Between July 2024 and June 2025, the Home Office revoked 1,948 sponsor licences. There are many HR directors at legitimate organisations who lose their licences not through fraud, but through systemic failures in post-recruitment governance. Your compliance risk doesn't peak during recruitment. It peaks in the 18 months following the recruitment of your overseas employees.

Unflagged payroll changes: The Manchester restructuring case

A Manchester technology company implemented cost-saving measures, reducing working hours by 10% with proportional salary adjustments. Payroll processed everything properly. Eighteen months earlier, they'd recruited a software engineer from India for £42,500. After restructuring, his salary dropped to £38,250—below the Skilled Worker minimum threshold.

Nobody flagged this as an immigration matter. During a compliance visit, UKVI discovered the breach. Under paragraph C1.13 of Part 3 of Home Office guidance for sponsors, salary changes must be reported via SMS within 10 working days if they drop below thresholds.

Licence suspended. 23 workers received curtailment notices. Legal costs: £47,000.

How to prevent it: The payroll team needs to know which employees are on sponsorship before processing any salary changes. When restructuring or pay adjustments occur, someone must cross-check the sponsored workers list against the new salaries and flag anyone whose salary drops below the minimum threshold.

Informal promotions becoming compliance violations: The London supervisor case

A London hospitality group had a restaurant supervisor from the Philippines on £29,000. When the manager left, the owner asked the supervisor to step up temporarily. No new contract. Job title stayed "supervisor" on payroll.

During a visit, UKVI interviewed her. She described manager duties: staff scheduling, supplier negotiations, and P&L reporting. The CoS stated Supervisor (SOC 5434). Actual role: Manager (SOC 1226). This is "duties drift"—grounds for immediate revocation under Annex C1(s) of Part 3 of Home Office guidance. The organisation received a B-rating downgrade (£1,579) and a 3-month action plan.

How to prevent it: Every quarter, someone needs to sit down and review what your sponsored workers are actually doing day-to-day versus what's written on their Certificate of Sponsorship. If a manager has quietly given someone more responsibilities, that needs to be caught and either reversed or properly reported.

Absence reporting: The Birmingham care home situation

A Birmingham care home employed a sponsored worker who stopped attending shifts. By day 12, managers discovered she'd been hospitalised with a mental health crisis. The home offered exemplary support—kept her position open, worked with the family. Nobody reported the absence through SMS.

She returned after 6 weeks. Four months later, UKVI discovered the unreported 12-day absence during an audit. Under paragraph C1.17 of Part 3, absences exceeding 10 consecutive working days must be reported within 10 working days after the tenth day. Compassion doesn't override reporting obligations. Licence suspended.

How to prevent it: Your absence tracking system needs a specific alert for sponsored workers. When any sponsored employee hits 10 consecutive days off without approval, that should land on someone's desk immediately—ideally whoever handles your Immigration compliance. They then have 10 working days to report it through SMS.

Key personnel changes: Edinburgh Finance Director's departure

An Edinburgh firm's Finance Director, registered as Authorising Officer, resigned immediately. HR assumed SMS updates could wait until the replacement started in two months.

UKVI wrote to the registered AO requesting information. The letter went into unforwarded mail. When no response came, UKVI inspected and discovered the AO had been gone for 6 weeks. Under paragraph C2.3 of Part 3, Key Personnel changes must be reported within 20 working days. Official correspondence was going to someone with no authority to respond. Sponsor Licence suspended immediately.

How to prevent it: When your Authorising Officer or any Level 1 User gives notice that a departure needs to trigger an immediate action list: who's covering temporarily, when will SMS be updated, and where is UKVI correspondence being redirected. Document who's responsible and what the deadlines are.

Remote working arrangements: The Bristol analyst relocation

A Bristol consultancy hired an analyst with Bristol specified as the work location. Standard terms included hybrid working. Eighteen months later, the analyst relocated to Glasgow but worked remotely full-time, visiting Bristol monthly.

The line manager approved it. HR updated the payroll address. Nobody reported the location change via SMS. During a visit, officers found three other sponsored workers with similar unreported changes. Under paragraph C1.19 of Part 3, sponsors must report when workers work "remotely from home on a permanent or full-time basis." Licence suspended pending full review.

How to prevent it: You need a clear definition of what counts as a location change that needs reporting versus normal hybrid flexibility. If someone's moving cities or going fully remote, that's reportable. Build in a quarterly check where someone reviews where each sponsored worker is actually based. Any sponsored employee requesting permanent remote work or relocating needs a sign-off from whoever manages your immigration compliance, not just their line manager.

What HR Directors must implement

These scenarios expose organisations with robust employment law processes but inadequate immigration compliance architecture. The solution is building immigration checkpoints directly into your core HR systems, something specialist firms like A Y & J Solicitors increasingly see missing during sponsor licence audits and post-grant reviews.

Automated flagging: Your HRIS must identify sponsored employees and trigger immigration reviews when payroll, absence, role, visa expiry notifications/alerts or location changes affect them.

Clear escalation: Any change affecting a sponsored worker gets escalated to your compliance lead before implementation.

Quarterly audits: Defined accountability to review every sponsored worker: Does the actual role match CoS? Is salary compliant? Location changed? Unreported absences?

Key personnel succession: Documented deputies and processes ensuring SMS updates within 20 working days of any AO or Level 1 User departure.