As the UK economy’s restrictions have eased, the true impact of Brexit and the coronavirus pandemic has become apparent by the shortages of workers in the embroidery and print industry

The pandemic resulted in lockdowns and isolation leading to loss of revenue, which have, in turn, impacted companies’ ability to retain staff. Concurrently, Brexit highlighted the recruitment challenge, as companies that previously relied heavily on European workers now struggle to recruit overseas workers to plug the employment gaps.

Increase in demand

During this time, demand has not faltered – meaning that employers in the embroidery and print industry may need to increase salaries to attract talent from a smaller pool of candidates. Employers can still hire European nationals who hold Settled or Pre-Settled status (and those who arrived in the UK before 1 January 2021 may be able to make an out of time application to this scheme). However, employers may look at how to bring overseas workers to the UK, using the UK’s points based system to establish whether they can hire non-UK nationals under a Skilled Worker visa. In order to do this, employers must first obtain a UK sponsor licence.

Applying for a UK sponsor licence

In order to obtain a sponsor licence, a company must file an application with the Home Office. As a holder of a licence, the company takes on record-keeping and reporting obligations in relation to those individuals that it sponsors and must ensure that it has the necessary processes and procedures in place to meet this threshold.

A company can qualify for a licence providing it is legally operating and trading in the UK and can provide prescribed documentation to evidence this.

Applications take six to eight weeks but can be expedited for an additional fee.

Licence holders are awarded an A-rating and can sponsor individuals to work in the UK, provided they meet the Skilled Worker or Intra-Company Transfer criteria (ICT permits are out of scope of this article).

Documents required:

  1. Online application form
  2. Four items of supporting corporate documents from the Home Office’s prescribed list. The most common documents submitted are usually:
  • Evidence of PAYE and Accounts Office reference numbers
  • VAT Registration Certificate
  • Corporate bank statement (mandatory if company in existence for less than 18 months)
  • Employers’ Liability Insurance Certificate (with coverage of £5 million minimum)
What obligations is a company taking on?

The Home Office places a high level of trust in companies in order to grant sponsor licences. Licence holders must be aware that:

  • The Home Office can conduct an audit of the company’s processes and records at any time from when the sponsor licence application is filed and during the lifetime of the licence
  • Such audits can be announced or unannounced, ie a compliance officer can arrive at a licence holder’s premises to request an audit on the spot
  • In an audit, the company must be able to demonstrate processes, systems and records which evidence adherence to the compliance duties imposed on all sponsors:
    1. Conducting valid right to work checks
    2. Maintaining sponsored migrant contact details
    3. Sufficient record-keeping
    4. Tracking of sponsored migrants and actioning reporting duties in a timely manner
    5. Other general sponsorship duties
Navigating the requirements of a Skilled Worker visa

Licence holders can sponsor non-UK nationals that they wish to employ provided that: the job on offer is at the required skill level – RQF 3 or above (A Level and equivalent); the individual speaks English to the required standard; the job offer must meet the ‘going rate’ [to see the rates for different occupation codes, go to imagesmag.uk/going-rates] for the role, or £25,600 for ‘experienced workers’, whichever is higher (various caveats apply).

Applicants must gain a minimum of 70 points to be eligible for this visa. Some criteria are mandatory whilst others are ‘tradeable’, as illustrated by the table below:

Appropriate skill level

The job role an employer is seeking to fill must be an eligible job at or above a minimum skill level—RQF level 3, which is roughly equivalent to A-levels. The applicant does not need to hold a formal qualification in order to satisfy the skills level requirement. It is the skill level of the job that will determine whether the threshold is met.

Roles that may be eligible for sponsorship include ‘screen printers’, ‘screen print managers’, ‘pre-press artworkers’ and ’embroiderers’. Subject to their job descriptions, they may fall within the following eligible Standard Occupational Codes:

SOC Code Annual going rate (based on 39 hour week)
1121 Production managers and directors in manufacturing £33,000 (£16.27 per hour)
5422  Printers £20,800 (£10.26 per hour)
5419 Textiles, garments and related trades not elsewhere classified £18,300 (£9.02 per hour)
Government costs

But what additional considerations for businesses are there? The UK has one of the most expensive immigration systems in the world. A medium-sized business wanting to employ a production manager for five years would be looking at costs of nearly £10,000 in addition to the licence fee. Any dependant family members would be charged additionally. Companies looking to go down this route should do so with budget available and ensure that they draft processes and packages to set out who picks up those costs.

What are the costs?

Sponsor licence

Type of Licence Small or charitable sponsors  Medium to large sponsors 
Skilled Worker £536 £1476
Skilled Worker visa
Small or charitable sponsors  Medium to large sponsors 
Certificate of Sponsorship £199 £199
Immigration Skills Charge £394 per year £1000 per year
Up to Three Years  Over Three Years
Shortage Occupation £464 £928
Outside of the UK £610 £1220
Inside of the UK £704 £1480
Under 18   Over 18  
Immigration Health Surcharge £470 per year £624 per year
Shift in the labour market

The current trend of employers having to push up salaries to attract talent is unsustainable, not least due to its impact on inflation. There is little doubt that taking on a sponsor licence is additional administration and has a financial impact, but amongst the compliance obligations and the costs, obtaining a sponsor licence does allow businesses access to a wider talent pool, which may help them fill vacancies more quickly and, perhaps, find some brilliant candidates!

Jennifer Simpson and Victoria Welsh are senior associates at Fragomen, a law firm that provides strategic consultative services and support to meet the full spectrum of business immigration needs.

www.fragomen.com