If you have employed and worked with a talented foreign worker for months, they'll learn your systems, clients, and way of working. At some point, you may want to bring them into your business as an employee, not just a contractor. This increases your commitment as an employer and, by default, makes you a sponsor.
This level of commitment comes with crucial immigration rules you must follow, costs to incur, and timelines to meet. To avoid delays, you may need a post licence priority service or professional immigration help processing sponsor licence changes quickly. This article explains what happens when you move from outsourcing a foreign worker to officially hiring them, along with other relevant details.
When to Switch From Contractor to Sponsored Employee
There is no set time to switch your contract workers to sponsored employees. The decision depends on several factors, including your relationship with the worker, talent needs, where they live, their right to work, and whether you and the worker meet Home Office sponsorship requirements.
For instance, after you initially outsource a specific role in your company to an overseas contractor, the individual may become closely integrated into your company's operations over time. As a result, you may want the individual to work in the UK as a permanent member of your staff.
This is where moving from outsourcing to direct hire UK requires planning. This matters because simply changing the person's job title or paying them through payroll does not, by itself, grant immigration permission to work in the UK. Therefore, if you need to convert an overseas contractor to a sponsored employee for your UK company, you must comply with UK employment law.
Do I Need a Sponsor Licence to Hire My Outsourced Team?
You will need a valid sponsor licence to hire an outsourced team if they are overseas workers without existing work permission. If your business doesn’t already have one, you must meet the eligibility criteria, apply online, pay the required fees, and submit the required supporting evidence.
If your outsourced team members are British or Irish citizens, or already have unrestricted right to work in the UK, you don’t need a sponsor licence. To hire your outsourced team, the Home Office must ensure that the role is genuine.
They also need to ensure you can demonstrate a real employment relationship with your outsourced team and that their salary and occupation code meet the relevant thresholds. After obtaining the sponsor licence, you can now issue certificates of sponsorship to the foreign workers, which they will use to apply for a relevant UK work visa.
How to Apply for a UK Sponsor Licence
To hire your outsourced team as employees, you must obtain a UK sponsor licence. You can apply for a sponsor licence by taking certain steps, including:
Step 1. Check Your Company's Eligibility
Your organisation must qualify to sponsor overseas workers. This means your organisation must meet eligibility criteria, including being genuine, operating lawfully, and able to meet its sponsor duties. You should demonstrate that your company has systems in place to monitor sponsored workers and comply with Home Office requirements.
Step 2. Select a Suitable Route
Choose the type of sponsor licence that suits your needs. If you need workers for long-term employment, you should choose a Worker licence. This will permit you to employ foreign workers through the Skilled Worker visa route.
However, if you want to sponsor temporary workers, you must have a Temporary Worker licence. This allows you to hire foreign workers under temporary work categories, including the Creative Worker visa and the Seasonal Worker visa.
Always check the UK government website for updates before choosing a licence. This is essential because choosing an unsuitable route could affect your ability to sponsor the foreign worker your business needs.
Step 3. Nominate Key Personnel
Next, identify suitable individuals to manage your company's sponsorship responsibilities through the Sponsorship Management System (SMS). You need an Authorising Officer (which you can be as the business owner), a Key Contact, and a Level 1 User. These individuals must perform crucial duties to manage the sponsor licence and sponsorship process. Before you choose them for these roles, they must meet the Home Office requirements.
The Authorising Officer holds the most important role in your organisation, as they are responsible for its activities. They can be the CEO, a director, the Head of HR, or the HR director. The Key Contact acts as the main liaison for UK Visas and Immigration (UKVI). They receive all communications from the Home Office on your organisation’s behalf. The Level 1 User then administers your company's sponsorship through the SMS.
Step 4. Gather Supporting Documents
Collect the necessary supporting documents related to your organisation and business type for your sponsor licence application. These documents can include:
- Companies House registration
- Evidence of business premises
- Employer's liability insurance
- Financial information
- Cover letter explaining your business sector, operating hours, and reason for applying
- Hierarchy chart specifying your company's directors, board members, and owners, including employee lists (for companies with 50 or fewer staff)
Step 5. Complete the Online Form
Fill out the sponsor licence application form on the UK government portal. You must provide accurate information about your business, key personnel, and proposed sponsorship activities. Double-check the application form and correct any errors before submitting. You must then pay the application fee of:
- £611 for small or charitable sponsors and temporary workers
- £1,682 for medium or large sponsors
- £1,071 for medium or large sponsors seeking to add a worker licence to an existing Temporary Worker licence
You may need post licence priority service, worth up to £350, if you need a quick response to your eligible requests via SMS.
Step 6. Submit Your Application
After completing the online application, follow the instructions to submit it with your supporting documents. If required, print, sign, and email the submission sheet and supporting documents to UKVI. The UKVI will then review your application and conduct further checks, if applicable. Keep copies of your application and supporting evidence so your organisation has a record of what you submitted.
Risk of Long-Term Outsourcing Without Sponsorship
Long-term outsourcing can cause issues when your business relies heavily on external workers. Constantly changing staff can lead to the loss of knowledge about how your company operates. You may also run into immigration issues if you treat workers as contractors for long periods without clear agreements.
Depending on local law, this can result in fines. Outsourced workers may also feel disconnected from your company's culture, goals, and day-to-day work. As an employer, assess your outsourced roles and identify potential weaknesses. This will help you decide whether you need a more direct employment structure to offer more stability to your business.
Conclusion
Employers must plan moving from outsourcing foreign workers to employing them. You must obtain a sponsor licence that aligns with the job they do. Without the sponsor licence, you cannot sponsor foreign contractors. You may request post licence priority service if you need some updates to your sponsor licence. If the process is unfamiliar, you may seek professional guidance from an immigration solicitor. They can help you navigate the recruitment process in compliance with UK immigration laws.