Skills crisis: Up to 93% of UK firms risk losing licence to sponsor foreign workers, experts warn

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Up to 93 per cent of businesses could lose their licences to sponsor migrant workers and many risk instant closure by the Home Office, new research has found.

Just 18 months before Brexit is scheduled to take place in March 2019, less than a third of company directors know they could face fines or even prison for failing to comply with strict rules for overseas workers which are already in place.

Two-thirds of businesses questioned in a survey 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, a report commissioned by immigration law firm Migrate UK found.

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.

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.

Despite the potential ramifications, Migrate UK found that just 7 per cent of companies are advertising job vacancies correctly when filling a position with a non-EEA citizen. The research also uncovered other errors in compliance, checks and audits which could result in licences being revoked.

Jonathan Beech, managing director of Migrate UK, said many firms were “sleepwalking” into the challenges ahead as departure from the EU looms.

“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,” he added. 

“With a new UK immigration system said to be in place by March 2019 when the free movement of people between the EU and the 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 they could do this. Losing a licence post-Brexit will be even worse news as skills shortages become even more acute.”

Migrate UK is advising firms that they need to keep HR files for all foreign workers. These need to be endorsed and contain a copy of the employee’s passport. 

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, Migrate UK said.