How has COVID-19 impacted Employers who hold a sponsorship licence?

Employers who currently hold a sponsorship licence remain bound by their sponsorship duties.

The UK Government announced the Coronavirus Job Retention Scheme (CJRS) to enable employers to pay staff who would have otherwise been made redundant due to the coronavirus.

Under the CJRS scheme, any employee who would have been laid off due to the coronavirus may be placed on Furlough Leave. A Furloughed employee remains employed but cannot carry out any work for their employer. However, where an employee does not qualify for furlough leave, sponsors may wish to consider putting employees on unpaid leave.

The Home Office has confirmed that where an employee is placed on unpaid leave due to the coronavirus, the Sponsor does not need to withdraw their sponsorship and will not face compliance action.

Sponsors who cannot pay the salaries of their sponsored employees because they have temporarily reduced or stopped trading altogether, as a result of coronavirus can, temporarily, reduce the pay of the employees they sponsor to 80% of their salary or £2,500 per month, whichever is lower.

Any reductions in salary implemented must be part of a company-wide policy to avoid redundancies and all workers should be treated the same. An employee must not be selected for a reduction in salary for the sole reason that they are a sponsored employee. This may amount to discrimination.

Any reductions in salary must be temporary and the employee(s) pay must return to at least its previous level once the coronavirus measures have ended.

If Sponsors decide to take advantage of the CJRS and reduce their employees’ salaries, it is recommended that they notify the Home Office through the Sponsor Management System (SMS) of the reduction in salary, stating the temporary reduction in gross annual salary as a result of COVID-19 and a company-wide policy to reduce redundancies. Employers should keep a record of those employees whose pay is reduced. Once the arrangements have ended, employers should make a
further report via the SMS confirming that pay has returned to at least the previous level.

Businesses also face an increase in the number of employees who are absent from work due to sickness either because they have contracted coronavirus, or they may be self-isolating. The Home office has adjusted some requirements so that Sponsors do not need to report absences due to COVID-19 and they do not need to withdraw sponsorship if an employee is absent from work without pay for 4 weeks or more. The Home Office will not take compliance action as a result of COVID-19.

As a result of COVID 19, many UK businesses have adapted to working from home, this includes those, that hold a sponsorship licence. Sponsors do not need to notify the Home Office that a sponsored employee is working from home due to coronavirus. However, they will still need to report other changes to working arrangements as usual.

The material contained on this website contains general information only and does not constitute legal or other professional advice and should not be relied upon as such. While every care has been taken in the preparation of the information on this site, readers are advised to seek specific legal advice in relation to any decision or course of action.