The Home Office recently updated its Skilled Worker sponsor guidance - Workers and Temporary Workers: sponsor a skilled worker (accessible) - GOV.UK to clarify that sponsors may not pass on certain immigration fees and costs to sponsored workers. 

Sponsor license holders are now expressly prohibited from passing on (including recouping or attempting to recoup) the following fees to sponsored workers:

• The Skilled Worker sponsor licence application fee or associated administrative costs (including premium services) from 31 December 2024. Although rather ambiguous, it appears that employers should also not pass on any legal fees incurred in relation to advice on obtaining a sponsor licence; and 
• Certificate of Sponsorship (CoS) fees for any CoS assigned by the sponsor under the Skilled Worker route on or after 31 December 2024.

In addition, sponsors are already prohibited from passing on the Immigration Skills Charge fee to the sponsored worker. 

 The guidance warns that if a sponsor seeks to pass on any of these fees or costs to the sponsored worker, the Home Office will normally revoke the sponsor licence. 

Why have these changes been introduced? 

These updates to the guidance reflect the commitments given in the Written Ministerial Statement made by the Home Office on 28 November 2024 - Written statements - Written questions, answers and statements - UK Parliament

The Home Office states that these prohibitions seek to “end the intolerable practice of recovering these costs from workers, which has led to the exploitation and unfair treatment of staff, particularly care workers who have been left in debt to their employers.” The Home Office has also indicated that they ”intend to build on this in due course, widening it to other sponsored employment routes” meaning further prohibitions could be on the horizon.

How does this impact clawback arrangements?  

One of the ways many employers have dealt with the significant increases to immigration fees in recent years is to require the sponsored worker to pay for some or all of the fees, such as the CoS fee, the immigration application fee and the Immigration Health Surcharge fee. Some employers request the contribution to fees at the point at which the relevant application is made, whereas others have sought to build in “clawback” arrangements, whereby the sponsored worker is required to pay back some or all of the sponsorship and other immigration fees if their employment terminates within a certain period of time. Employers should ensure that any future clawback agreement does not require the sponsored worker to repay any of the prohibited fees referred to above. 

As the changes apply from 31 December 2024, existing clawback arrangements are unlikely to be affected. However, employers should review the terms of their standard “clawback” agreement and amend this as necessary to comply with the new prohibitions going forward. Employers should also double check that any existing clawback arrangements clearly state that the sponsored worker does not have to repay the Immigration Skills Charge as this was prohibited even before the recent change to the sponsor guidance.