If you hold a Tier 2 Sponsor Licence and want to hire non-EEA skilled workers, it’s important to understand the rules when using workers on third-party contracts. The main issue is whether you are acting as an employment agency (which is not allowed) or managing workers properly through contracts held by your company (which is allowed under certain conditions).
Understanding the Rules for Third-Party Contracts
A common mistake is when companies provide skilled workers, like IT professionals or construction workers, to other businesses on projects that the sponsoring company has no involvement in. This is not allowed. A correct approach would be where your company sends a worker, such as an IT engineer, to another company for a specific project that ends after a set period. In this case, the sponsoring company must retain full control over the work and the outcome.
According to the Tier 2 Policy Guidelines, the rules are clear. A sponsored migrant can only work for the employer that sponsored them. You can only assign a Certificate of Sponsorship (CoS) if your company is genuinely responsible for all the work and the project’s results. Workers cannot be contracted to perform ongoing roles for third parties.
Here is an excerpt from the guidelines:
“You must not hire migrants as agency workers or to perform ongoing, routine services for third parties. The work must be part of a defined project with a clear end date.”
How to Hire a Foreign Worker Correctly
To comply with the rules, Tier 2 sponsors must take proper steps when hiring skilled foreign workers. This includes:
- Ensuring the role is a genuine vacancy.
- Following the Codes of Practice to make sure the worker is suitable for the position.
- Conducting a Resident Labour Market Test (RLMT) to confirm that no suitable local worker is available.
- Keeping full records of your recruitment processes.
For many companies, especially small and medium-sized businesses (SMEs), it can be challenging to manage these compliance responsibilities without expert support. This is where a qualified immigration lawyer can help you navigate the process.
What Are Your Responsibilities When Using a Tier 2 Worker for Third-Party Contracts?
As the Tier 2 sponsor, you are responsible for the worker’s employment, even when they are working on a third-party project. This means:
- Your company must hold the contract for the work being done.
- You are responsible for the worker’s output and performance.
- You must keep records of the worker, including attendance, contact details, and any changes.
- The contract should have a clear end date, and the worker must stop work once the contract ends.
If these rules are not followed, UK Visas and Immigration (UKVI) may take action, including auditing your company and potentially suspending or revoking your sponsor license.
Challenges of Using Tier 2 Workers on Third-Party Contracts
UKVI regularly conducts audits of businesses, and some sectors, especially IT, are more likely to be scrutinized. Companies in the tech industry, in particular, have been targeted due to their use of Tier 2 (Intra-company Transfer) workers, especially those from India.
If you fail to meet the sponsor license requirements, your company could face penalties, including the loss of your sponsor license, reputational damage, and even business closure. This is why it’s vital for all businesses, especially SMEs, to ensure full compliance with the rules.
How to Stay Compliant with Record-Keeping and Planning
To avoid problems, ensure you have clear HR policies in place that follow UKVI guidelines. This includes keeping detailed records for each sponsored worker and ensuring that all third-party contracts are in line with the rules. Make sure that:
- Your company holds the contract for any work done by a migrant worker.
- You retain responsibility for the worker’s performance and outcomes.
- You document the worker’s details, including attendance, contact information, and project status.
How Law and Visas Can Help
At Law and Visas, we specialize in Tier 2 Sponsor Licences and can help your business remain compliant, especially when using workers on third-party contracts. We assist companies in managing compliance audits and ensuring they meet UKVI’s requirements. If your sponsor license is at risk, we can help you navigate the process and even get a revoked license reinstated.
