New requirements for licensed sponsors – as guidance is updated significantly by the Home Office

On the 6th of March 2026 the Home Office issued new versions of its Sponsor Guidance documents, including Appendix D (on retaining documents) and the Skilled Worker guidance. As a result, there are significant updates to overall Sponsorship compliance that will require Licensed Sponsors to adapt quickly in order to avoid compliance action.

In this article Alex Christen and Jack Dunne analyse the changes brought about by the updated guidance, and discuss the potential implications for sponsors in the UK.

What are the key changes?

Part 1: Applying for a licence

A new paragraph has been added in the ‘Guiding principles’ section, outlining that:

“Participation in the sponsorship scheme is voluntary and sponsors seek membership for their own benefit. Membership is subject to the strict terms contained within this guidance. Sponsors should be aware that a licence is held at the broad discretion of the Home Office and can be terminated at any time. A licence creates no property or other enforceable right.”

This represents a reminder from the Home Office that sponsorship is a privilege, not a right. It indicates that the sponsorship scheme is voluntary and that guidance set by the Home Office must be followed in order to retain “membership”.

This is new language for the Home Office. Previously, the guidance suggested sponsors were almost an extension of the Home Office itself, able to self-police application of sponsor processes. The updated description signals a change in that relationship, with the Home Office dictating rules that “members” must comply with, or face compliance action.

• New paragraphs L2.6 to L2.7 introduce a ‘Worker rights and welfare’ sub-section, which requires sponsors to ensure that workers understand their employment rights in the UK. Whereas the guidance was previously concerned with key rights, such as National Minimum Wage and Working Time Regulations (although sponsors were expected to comply with wider “employment laws” as a whole), sponsors are now required to ensure that workers are aware of wider rights, specifically:
  • pension auto-enrolment and opt-outs;
  • statutory leave and pay;
  • health and safety;
  • Trade Union membership and activities;
  • Equality Act duties; and
  • how to raise grievances.

At a time of significant change to employment law, with the implementation of the Employment Rights Act 2025, this new requirement, to make sure sponsored workers are aware of their employment rights and retaining evidence of doing so, adds another compliance layer for sponsors to contend with.

In addition, such information should not just be provided to sponsored workers, but to the whole workforce, in order to avoid any claims by non-sponsored workers that they are being treated differently.

Under the new guidance it is more important than ever that sponsors get to grips with the changes under the Employment Rights Act 2025, so that they can update and inform their workforce accordingly.

• A new paragraph L2.5 clarifies that all prospective sponsors and licence holders are required to read all relevant parts of the sponsor guidance and stay up-to-date with any changes. This requirement was always there, but its inclusion in the updated guidance demonstrates a clear focus on sponsorship being a voluntary scheme which places an onus on those involved to follow the guidance.
• Authorising Officers should make sure that they know their way around the different guides and understand each update fully, so they can demonstrate knowledge of the guidance to compliance officers in the event of a compliance audit. They should also make sure this requirement is cascaded down to all Key Personnel and ensure knowledge-sharing is frequent, and documented.
• The previous ‘Genuine vacancy, salary and skill level’ section has been replaced by an ‘Eligible role requirement’, and all references to ‘genuine vacancy’ have been replaced with guidance on whether work meets the definition of ‘eligible role’. The definition is now contained in a separate glossary. The guiding principles have not changed significantly, and sponsors must ensure that the role:
  • actually exists (or is reasonably expected to exist) at the time the Certificate of Sponsorship (CoS) is issued;
  • requires the job holder to perform specific duties and responsibilities (including the number of hours of work per week) as set out in the CoS;
  • meets all the route-specific requirements, including minimum skill and salary levels, and complies at all times with Working Time and National Minimum Wage requirements;
  • is appropriate, in light of the company’s business model, business plan, and scale.
• The guidance has always contained examples of what is meant by this and a new example of a role that is not eligible, Example 3, has been added as follows: “You tell us that you will be sponsoring workers for roles with an annual salary which does not appear to be commensurate with the turnover or financial situation of your business and you are unable to satisfactorily explain how those salaries will be funded sustainably. We are therefore not satisfied that you will be capable of paying the salary you have stated in your application (or in any Certificate of Sponsorship you have assigned or applied for in relation to that role).”
• This new measure of financial solvency will add extra pressure to sponsors who are newly incorporated, or at an early stage of growth, who may need to provide additional supporting evidence to the Home Office to substantiate that a role is indeed eligible.
• Other changes have been made to this guide to include new grounds where the Home Office must revoke a licence (including if a sponsor has lost its mandatory registration or licence) – the general theme being that there is a focus on compliance, and sponsors are expected to adhere to a high standard, or they will face compliance action.

Part 2: Sponsoring a worker

• Following several confusing versions of the right to work guidance, the sponsor guidance now clarifies that a sponsor must conduct right to work checks on all individuals they sponsor, including those who are not direct employees.
• New paragraphs S3.9 and S3.10 emphasise the importance of ensuring that the job role and job description for which sponsors assign CoS are accurate reflections of what the worker will actually be doing in the organisation. A failure to do so may lead to compliance action. This should be common sense for sponsors, but the changes highlight areas where the Home Office may be checking in compliance inspections, and the importance of accurately describing a role when assigning a CoS and choosing the correct occupation code.
• The guidance has been amended to clarify that a CoS will only be labelled ‘used’ once a decision to grant or refuse a license has been made. This differs from previous guidance, which stated that a CoS would appear ‘used’ once applied in support of an application, and means that sponsor notes may now be added to a CoS confirming changes to start or end dates up to the point a decision is made. Sponsors will need to take note of this, as updates to CoS details should no longer be added via the Sponsor Management System under ‘report worker activity’ but on the CoS itself (if not showing as ‘used’).
• Paragraph S9.21 has been amended to lower the threshold required for revocation of a sponsor licence where a worker’s salary has been artificially inflated to qualify for settlement in the UK. Whereas the previous guidance noted that the Home Office needed to be ‘satisfied that’ this had occurred to revoke a licence, the updated guidance states that the Home Office need only have ‘reasonable grounds to suspect’ this. This again lowers the threshold for compliance action, making it all the more important for sponsors to comply. Note the corresponding change to part 3 of the guidance (below) on artificially inflating salaries for sponsored roles.

Part 3: Compliance

• References to ‘genuine vacancy’ or ‘genuine employment’ have been changed to ‘eligible roles’ in accordance with the new definition.
• A new section entitled ‘Matching the job role with the occupation code and job description when assigning a CoS’ has been added, reflecting the introduction of the new Paragraphs S3.9 and S3.10 of Part 2. This requires that occupation codes and job descriptions accurately reflect the sponsored role, prohibits exaggeration of the role, and requires notification of role changes. It also provides that working in a role that does not match the occupation code or job description will be a mandatory ground for revocation. This has always been the case, and sponsors have always been required to choose the most appropriate occupation code for the role, and ensure the job description reflects what the worker will do in practice, however, expressly including this in the guidance leaves no room to doubt that the Home Office would take compliance action against sponsors who they believe are exaggerating roles for sponsorship.
• A new paragraph C10.4 clarifies that grounds for licence revocation “do not necessarily require breaches to be deliberate or made knowingly”. This follows the theme of ensuring a strict adherence to the rules of the sponsorship scheme, and creates a heightened risk of licence revocation where sponsors fail to properly manage their licence. Accidental breaches can still result in the loss of a licence.
• Re-application provisions have been strengthened in this section, so that, where a licence was revoked ‘for reasons relating to dishonesty or deliberate misconduct’, the Home Office will require ‘compelling evidence’ that the applying organisation is now suitable to hold a licence. Again, this follows the theme of sponsorship being a voluntary scheme with rules that must be adhered to.
• The updated guidance introduces an amended mandatory ground for refusal or revocation of a sponsor license where a sponsor has artificially inflated a worker’s salary. Whereas the previous guidance contained a mandatory refusal or revocation for salary inflations in relation to settlement applications only, the new ground has been expanded to include inflations for entry clearance, permission, or settlement. This is not necessarily a change, as inflating a salary to fit the criteria for sponsorship has always been risky, but expressly including this in the rules again signals closer scrutiny by the Home Office of sponsors’ operating practices and expands the grounds on which to take compliance action.

Appendix D: Retention of documents

• A new record-keeping duty has been added, reflecting the requirement for sponsors to ensure that workers understand their employment rights in the UK. To prove compliance with this, sponsors must now have HR systems in place which demonstrate and retain evidence that this information has been provided.
• In practice, this will mean that sponsors must not only update their workforce on their employment rights but also keep clear evidence that they have done so, and continue to do so, as employment rights change. Certain information about rights will be given to employees in their contracts of employment and through policies and procedures, or staff handbooks. Sponsors should keep rolling records that they have provided all staff with information such as onboarding checklists, records that employees have read and understood the staff handbook, and any updates to policies and records of staff having received training during the induction process and throughout employment.

Skilled Worker Guidance

• A new provision has been added to the list of considerations for a defined CoS request, which notes that an application for a defined CoS will be rejected where “you are relying on a transitional provision but have not yet identified a specific worker for the job, or the worker does not meet the transitional provision”.
• In practice, this limits speculative applications for defined CoS and places greater scrutiny on ensuring transitional provisions are met at the earlier stages of the process. Sponsors may be expected to provide evidence to the Home Office alongside a defined CoS request that these requirements are met.

What do these changes mean for you?

These changes represent stricter sponsorship rules, with an emphasis on sponsorship being a voluntary scheme under which the Home Office has discretionary grounds to revoke licenses.

Whereas before, sponsors may have had greater discretion and wider scope to retain their licence for unknowing breaches, the Home Office has now made clear that it expects strict adherence to the updated sponsor guidance, which expands the duties placed on sponsors, regardless of intention.

This ultimately means that sponsors should update their HR systems and processes to ensure that the updated guidance is considered and applied when applying for a licence, sponsoring a worker, and complying with the Home Office rules. A failure to do so may result in the revocation of licences.

Next steps:

In light of these changes, sponsors should consider taking the following actions as soon as possible:

• Update internal compliance processes to reflect the updated guidance.
• Review current sponsored workers, and check whether their actual roles match CoS details, including salary, occupation code, and job description.
• Assess salaries for sponsored workers and be prepared to demonstrate that they are commensurate with the financial situation of your business.
• Ensure all worker salaries accurately reflect the work that will be carried out by sponsored workers.
• Train HR and recruitment staff to increase awareness of greater compliance risks and responsibilities.
• Communicate the changes to sponsored workers and explain how they may be affected.
• Ensure your business is fully aware of the changes to employment rights under the Employment Rights Act 2025.
• Ensure all sponsored workers are aware of the full suite of their employment rights in the UK, including upcoming changes.
• Document systems for informing sponsored workers of their employment rights.

How can we help?

Alex Christen

Partner

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