What type of business can apply for a Skilled Worker Licence?

Disclaimer: The information in this blog is accurate as of its publication date. Any updates after that date are not reflected here.

The Skilled Worker Sponsor Licence is an absolute mandatory requirement from 1 January 2021 for any UK employer who seeks to hire overseas skilled workers or staff who does not have already permission to work in the UK. This means you must secure a Sponsor licence first to hire your prospective workers.

The kind of business you own decides the sponsor licence compliance and duties towards the workers.

Having secured a Skilled Worker Sponsor Licence permits you to hire staff via the Skilled Worker route (provided the job is in an eligible skilled occupation and meets the salary and going rate requirements) and assign them a Certificate of Sponsorship (CoS).

In this blog, we will look at the various types of businesses that can apply for skilled worker licences and its application process and timeline for approval.

Requirements for a Skilled Worker Sponsor Licence 

The Home Office thoroughly checks and scrutinises you while considering your application. Unless the Business or Organisation seeking the skilled workers licence fully satisfies the requirements laid down in Part 1 of Workers and Temporary workers guidance for Sponsor licence, your application is likely to be refused.

Let us see the grounds on which your business or organisation is validated. You must prove that you:

1. are a genuine organisation or business operating lawfully in the UK – to prove this, you must provide four documents as mentioned in Appendix A of the Sponsor Licence guidance;
2. are honest, dependable, reliable, and are not engaging and have not engaged in behaviour or actions that are not favourable to the public good – to assess this, the Home Office will look at your history and background, the key personnel named in your application, and any staff involved in your day-to-day running;
3. are capable of fulfilling your sponsor duties and evidencing your compliance within the timeframe and manner outlined in the Home Office Sponsor duties and compliance guidance – To assess this, the Home office will scrutinise your current human resources and recruitment practices to make sure you will be able to fulfil your sponsor duties, and you may expect uninformed site visit or audit before your licence is granted;
4. can offer genuine employment that meets the skill level and salary requirements;
5. meet the eligibility and suitability criteria.

How is your application for a skilled worker licence assessed?

Sections L8 and L9 of the sponsor licence guidance highlights how the Home Office assesses the application and circumstances in which they visit the employer’s site and sponsor licence ratings.

There are broadly 2 assessment criteria:

1. Eligibility and suitability
2. Sponsor licence rating

Eligibility criteria

To confirm that you are eligible for a licence, you must provide the supporting documents mentioned in Appendix A of the sponsor guidance and any additional documents that the Home Office may request. These documents ascertain that you are genuine and have an operating or trading presence in the UK.

If you do not have any operating or trading presence in the UK, the Home Office will refuse the application. If, after securing a licence, the Home Office finds that you do not have a legal presence in the UK, your licence will be revoked.

Suitability criteria

The suitability criteria determine whether the Home Office will: grant or refuse your application, make changes in the sponsor rating of an existing licence, or revoke a current licence. It may also limit the number of Certificates of Sponsorship (CoS) that you can assign.

The suitability criteria are assessed on the following:

• You must have a human resource and recruitment systems in place to meet, or continue to meet, your sponsor duties. To assess this, the Home Office may visit you and conduct checks on an immediate, unannounced basis to ensure you are complying with your sponsor duties
• You meet the requirements of the route, or routes, in which you are applying to be a licensed sponsor
• you have any criminal convictions or civil penalties.

You must offer a genuine vacancy – if your business does not involve enough physical space, you must adopt a virtual business model.

Sponsor rating

Throughout the life cycle of your licence, the Home Office will rate you as either A or B, according to the assessment of your ability to comply with your sponsorship licence duties.

If the Home Office does not find you fulfilling the requirements and obligations within the timeframe, your licence could be downgraded to a B rating.

There may be businesses with more than one sponsor licence; each must fulfil their respective sponsorship duties.

How to begin the application process?

You must make an online application with a minimum of 4 pieces of evidential documents as mentioned in Appendix A.

This evidence can include the following as set out in L7.2 of the sponsor licence guidance.

1. proof that you are based in the UK, are genuine and are operating or trading lawfully in the UK (an organisation is deemed to have been ‘operating or trading’ in the UK from the point at which it was incorporated)
2. if relevant, evidence that you hold the appropriate planning permission or Local Planning Authority consent to run your type and/or class of business at your trading address if consent is required by your local authority
3. if you are required to be registered with or inspected, or monitored by a statutory body to operate lawfully in the UK (such as nursing or care home, financial or insurance business, or healthcare provider), proof that you are registered with the appropriate body
4. if you are applying as a head office and all branches, or as a group of branches, you must submit evidence for each individual branch within that group
5. if you are a food business, proof of your registration with or approval from a relevant food authority
6. evidence that you have employer’s liability insurance to cover at least £5m from an authorised insurer
7. Current financial accounts
8. Evidence of registration with HMRC as an employer.

Considerations if you have multiple branches

If you have multiple branches, in the form of subsidiaries, entities, campuses and locations, then you can register the branches in a number of ways:

1. You can apply for a single licence that includes your head office and all branches in the UK
2. Every branch will apply for its own licence
3. You can group several branches under a single licence – for example, a large UK company can register all of its operations in a particular region under a single licence

Fee for a Skilled Worker application

The fee usually depends on the size and type of organisation.

Organisations or businesses categorised as medium and large must pay a sponsor licence fee of £1,476. 

An organisation would be categorised as a small sponsor if two of the following are applicable:

1. The annual turnover is less than or equal to £10.2 million 
2. The total assets are at least £5.1 million
3. They have a workforce of 50 employees or less

Small organisations or businesses are required to pay a sponsor licence fee of £536.

Once you are granted a skilled worker licence, it is valid for four years and needs renewal before it expires.

Conclusion:  Any business, whether small, medium or large, needs to fulfil specific eligibility and suitability criteria to qualify for a Skilled Worker licence. Of critical considerations required for securing a skilled worker licence is the honesty, dependability, reliability, genuineness and lawful trading presence of the business. Overlooking the essentials to attain a licence could pose a threat of refusal. It is critical to understand the assessment and procedures for the licence as highlighted in the Home Office guidance to sponsor skilled staff for your business.