Post-Brexit Skills crisis: Up to 93% of UK firms risk losing licence to sponsor foreign workers

A report commissioned by Migrate UK, found that the majority of firms were not aware of the correct rules for sponsoring overseas workers, and not prepared for the challenges ahead as departure from the EU looms.

Companies in the UK that fill positions with non-European Economic Area (EEA) citizens must apply to sponsor a candidate through particular types of visas. Amongst 1,000 businesses surveyed, that currently hold Tier 2 or Tier 5 licenses to sponsor overseas workers, the report found that two-thirds of businesses were unaware what documents they needed to keep on file for sponsored overseas workers; almost all company sponsors (95 per cent) were not reporting all the required changes in circumstances for sponsored workers and; only 7 per cent of companies were advertising job vacancies correctly when filling a position with a non-EEA citizen.

Under the Immigration Act 2016, the Government introduced harsher punishments for those who fail to keep up with the Act’s requirements, including “on-the-spot” closure for companies that do not meet the provisions of the regulations and even prison sentences for directors. In light of the report’s findings, up to 93 per cent of businesses could lose their licences to sponsor migrant workers and many risk instant closure by the Home Office.

Revocation of sponsorship licences could mean firms cannot hire non-EEA citizens, exasperating the skills shortage as Brexit already threatens to cut the available labour force.

Jonathan Beech, managing director of Migrate UK states: “Many businesses are already seeing a growing skills problem in the UK, particularly in the IT, finance and engineering sectors relying heavily on skills from outside the UK, which will decline if companies fail to get their ‘house in order’ and prevent a loss of talent before the UK exits the EU.”

The Government intends to install a new UK immigration system by March 2019, when the free movement of people between the EU and UK ends. It is likely that EEA citizens will need some kind of clearance to enter the UK to work, and sponsorship is one way to achieve this. Therefore losing a licence post-Brexit will be even worse news as skills shortages become even more acute.

Employers that employ non-EU workers are obliged to keep records such as attendance and absence, evidence of a resident labour market test (where they must prove they would find it difficult to find a UK worker for the same role), professional accreditations and pay slips.

Employers who wish to retain both EU and non-EEA workers need to get fully prepared ahead of Brexit. HR files should be kept for all workers, endorsed and with passport copies. Home Office rules also require companies to carry out internal audits to ensure all correct paperwork is in place. Without this firms risk being closed down if immigration officials pay them a visit.

EU nationals have not yet seen a change to their immigration status but they should be aware they can apply for a registration certificate of permanent residence if they want to safeguard their future in the UK after Brexit.

Please contact our specialist teams in Business and Personal Immigration for expert advice, if any of the issues above are of concern to you.

Lawrence Lupin
Lawrence LupinFounding Director
Lawrence Lupin is the founding Director and head of the firm.
View Profile
Tamana Aziz
Tamana AzizSupervisor Solicitor
Tamana is a solicitor with over 15 years of experience in Immigration Law.
View Profile
Nataliya Burns
Nataliya BurnsSupervisor Senior Caseworker
She has worked in immigration and asylum law since 2001 and is accredited by the Legal Services Commission as a Senior Immigration Caseworker and a Supervisor.
View Profile
Kemi Alao
Kemi AlaoSupervisor Solicitor
After graduating at the University of East London in 1992, Kemi studied at the College of Law and later completed the Legal Practice Course six years later.
View Profile
Yasmine Lupin
Yasmine LupinSolicitor
Yasmine Lupin is a practising solicitor and has more than 10 years experience working in both the non-commercial and commercial sectors.
View Profile
Anitha Gopal
Anitha GopalCaseworker
Anitha has successfully passed the Law Society’s Immigration and Asylum Accreditation Scheme (IAAS) and has qualified as a Senior Level 2 Caseworker.
View Profile
Anna Hawkes
Anna HawkesSenior Caseworker
Born in Sweden, she came to the UK in 2000 and graduated as a Master of Law at the University of Essex in 2001.
View Profile

If you have questions about any of the issues raised, please contact our immigration team on
+44 (0)20 3503 0880.