Sponsor Licenses allow UK-based companies to hire international talents. This creates a big opportunity for both employers and foreign talents looking to work in the UK. Sponsor licenses come with certain conditions to maintain, and licensed sponsors have certain duties and responsibilities to comply with.
One requirement is to report significant employment changes in sponsored employees' circumstances to the Home Office within a given period of time. Failing to report any of the changes can be considered non-compliance with the sponsor’s duties, which can result in downgrading, suspending, or revocation of the sponsor license.

What changes do you have to report to the Home Office?

You must report the following changes to a sponsored worker’s circumstances by no later than 10 working days after the relevant change or event has occurred or within a period specified here. 

• If a sponsored worker does not start the job within 28 days of the starting day of the job;
• If a sponsored worker is absent from work for more than 10 consecutive days without your permission;
• If a worker is absent for more than 4 weeks in a calendar year without pay or on a reduced pay;
• If a worker is on unpaid leave;
• If a worker’s salary is reduced from what was mentioned in the certificate of sponsorship
• If there is a significant change in the details of a worker’s employment, such as changes in job title, core responsibilities, salary, work location, or promotion;
• If there is a change in a worker’s job contract;
• If you stop sponsoring a worker for any reason;
• If a worker’s employment ends before the date mentioned on the COS due to termination, resignation, or the early finish of the project. You must submit details of the name and address of the new employer (if known);
• If a sponsored worker does not comply with the terms of their visa;
• If you have any information that suggests that the sponsored employee is in breach of the UK’s immigration law;
• If there are any visa route-specific changes;
• If you are sponsoring an offshore worker (a person who arrives first in the UK at the start of their job and leaves the UK at the end of their job). You must not report to the Home Office before offshore workers arrive or leave. You must do this within 10 working days after the dates they arrive and leave;
• You must inform the police if you have any suspicion of workers engaging in criminal or terrorist activities.

Consequence of not reporting changes in employee’s circumstances

You should ensure that all the changes related to the circumstances of the sponsored employee that must be reported are being reported in time to the Home Office through SMS (Sponsoring Management System).
If you fail in your duty to report the key changes or events, you may face the following consequences:

1. Downgrading of your license rating

Initially, when your sponsor license application is successful, you are awarded an A-rated license. An A-rated license allows you to sponsor foreign workers by assigning a certificate of sponsorship to them.
If you fail to notify the Home Office about the changes and events related to the sponsored workers, you are considered not complying with your sponsor’s duties. As a result, the Home Office may consider downgrading your sponsor license from an A-rated license to a B-rated license.
A B-rated license means you cannot assign a fresh COS anymore until you make improvements and regain an A-rated license. To upgrade your license back to the A rating, you need to follow the action plan provided by the UKVI. You also have to pay a fee of £1,476 for an action plan within 10 working days from the day your license is downgraded. Failing to pay the fee will result in losing your sponsor license. Your license can be downgraded twice during the validity period of your license, after which your license will be revoked.

2. Suspension of your sponsor license

If the Home Office understands that by not informing it about the changes in sponsored employee changes you are breaching your sponsor duties and posing an immigration threat to the immigration control, it may suspend your sponsor license. Once your license is suspended, you cannot assign a COS during the suspension period. If your license is suspended, it will apply to all routes in which you are licensed. However, workers you have sponsored before the suspension, and who have valid permission to enter or stay, will still be able to enter the UK and work for you unless or until the Home Office decides to revoke your license by the time they travel.
The Home Office may suspend your license with or without investigation. The Home Office will write you a letter giving reasons for suspension. If it suspends your license where it says a following investigation would take place, you will be given 20 days to respond to the suspension letter. You can respond to the decision by giving reasons with supporting documents why you think the decision of the Home Office is incorrect. You can also set out your plan for mitigating non-compliance. If an investigation is conducted, you can respond to the suspension and investigation report before the Home Office confers a final verdict.

3. Revocation of your license

Revocation is a serious and final decision taken by the Home Office. A suspension of the license is a temporary event, and you are given time to address the issues and start complying with the sponsor’s duties. But if you fail to do so or you have committed significant breaches, your license can be revoked or withdrawn. Revocation is the permanent removal of the sponsor license. It means it cannot be restored,
which is possible in downgrading and suspension of the license. Revocation immediately stops you from sponsoring any new or existing employees. Revocation is not reversible. You can only reapply for a new license if eligible, often after a cooling-off period, which is generally 12 months.
Not only can you not sponsor any employee after revocation, but it also disrupts your ongoing projects and impacts productivity, and you may incur huge financial losses as well. It also creates a bad name for your company and distrust among your partners, damaging your reputation. Revocation also hurts sponsored employees as their visas may be curtailed.

Conclusion

A sponsor license is a great privilege that allows you to bring in some of the best talents from across the globe. This creates a great opportunity for your business growth, increases productivity, and generates higher profits than before.
However, a sponsor license comes with responsibilities, and you must continue to meet them. You must have people and a system in place to keep your license A-rated all the time. And it is not hard to do so either, if done properly form the beginning.
Failure to comply has huge negative consequences, as mentioned above, which you must avoid in the first place.