In a recent post on their Immigration blog, Linky Trott (partner) and Sundeep Rathod (senior associate) of Ally Law member firm Edwin Coe discussed the options available to employers to recoup the fees associated with sponsoring a foreign skilled worker to work in the UK, should the worker decide not to join the employer, or quits shortly after beginning work.
There are a number of fees that an employer will incur when sponsoring a skilled worker for permission to work in the UK. All of these fees are incurred ‘up front,’ before the individual has commenced employment and it can represent a significant cost to the employer.
A question arises: If the individual has a ‘change of heart’ and decides not to join the employer, or starts their employment but resigns only a few months into the job or at any point during their sponsored employment, can the employer recoup from the individual the costs incurred by the employer in sponsoring the individual?
The answer is ‘yes’ in relation to some of the fees incurred, but there are some ‘safeguards’ which must be considered.
The fees that an employer will incur in sponsoring an EU or non-EU national on a Skilled Worker or Global Business Mobility visa are as follows:
- The fees for obtaining a sponsor licence (currently £536 for small companies and £1,476 for medium and large companies) plus any professional fees incurred in connection with that application.
- The fee for the employer issuing a Certificate of Sponsorship (CoS) for the relevant individual (currently £199).
- Any professional fees incurred by the employer in connection with the issuance of the CoS for the relevant individual.
- An Immigration Skills Charge (ISC) fee of (currently) £364 a year for small companies (for a three-year visa the total cost would be £1,092) and £1,000 per year for large companies (for a three-year visa the total cost would be £3,000).
In addition to the above, the relevant individual who is being sponsored has to pay the following fees:
- A UKVI visa fee of £625 (save where the individual qualifies for a Health & Care visa or if the job is a Shortage Occupation role, where the visa fee would be reduced); for out of country applications, the fee is slightly higher.
- The Immigration Health Surcharge (IHS) which is £624 per year (for a three-year visa the total cost would therefore be £1,872); again, this fee would not be applicable if an individual qualifies for a Health & Care visa.
- Any fees paid to expedite the issuance of the UK VI visa. These fees would typically range from £250 to £800 depending on the level of priority service purchased.
The fees listed above at 5, 6 and 7 would be applicable for each dependant applying for a visa; however, the Immigration Health Surcharge fee for dependants under 18 is slightly lower.
It is common for the employer to offer to pay the fees that are payable by the individual listed at 5 to 7 above, which presents a greater ‘up front’ cost to the employer, particularly where there are number of dependants who will join the individual. To put this into perspective, the total cost for an employer to sponsor a foreign worker and three dependants (spouse and two children under 18) would be just over £14,000 in Government fees alone.
From the fees listed above there is a specific prohibition on any clawback or repayment obligation of the following:
- The Sponsor Licence fee (1, above)
- The CoS fee (2, above)
- The ISC (4, above).
If the employer were discovered by the Home Office to have recouped the above fees from an employee, it is likely to result in compliance action being taken against the employer which could lead to downgrading, suspension or revocation of its Sponsor Licence.
Of the remaining fees, the common law will inform the entitlement to include a clawback/repayment clause in the contract, and the relevant issues to consider will include the following:
- The rule against penalty clauses in the event of breach of contract (the individual not starting work at all in breach of the contract that was signed)
- Restraint of trade (where there is no breach, but the individual leaves within a few weeks or months such that the employer has not had the ‘benefit’ of the financial investment made)
The above are not the only issues to consider. For additional detail on recouping sponsorship fees for skilled workers — including penalty clauses, restraint of trade and discrimination issues, unlawful deductions from wages, and jurisdictional considerations —please click here for the full blogpost by Linky Trott and Sundeep Rathod of Ally Law member firm Edwin Coe LLP.