Immigration costs: what construction employers need to know

The most recent updates to the sponsor guidance by UK Visas and Immigration (UKVI) mark a critical shift for businesses holding worker or temporary worker sponsor licences.

With the most stringent compliance measures seen in more than a decade, these changes are reshaping the way businesses manage sponsorship costs and responsibilities.

The latest data from 2024 reveals the severity of these measures: 509 skilled worker sponsor licences were suspended, and 513 were revoked in just the third quarter alone.

For construction businesses, the landscape has become even more complex. UKVI has introduced tighter restrictions on sponsorship costs, directly impacting all sponsors regardless of size.

Sponsors were previously prohibited from passing on the immigration skills charge (ISC) to sponsored workers. This fee is paid at the time of assigning a certificate of sponsorship (CoS) to a sponsored worker in one payment. But UKVI remained silent on any other government fees.

It is now also prohibiting businesses from passing on to sponsored migrants the cost of:

Sponsorship costs have increased significantly over the past decade and these changes could have considerable financial implications for employers.

Sponsors who previously relied on sponsored workers to bear these costs – typically indirectly via the incorporation of clawback provisions in their employment contracts – must now re-evaluate their strategies as they can no longer recoup these costs.

While clawback clauses remain a popular method used to recover some of the costs of sponsorship should a sponsored employee leave their position early, businesses must ensure they are only reclaiming the costs to which they are entitled.

Businesses should therefore carefully review their existing policies and employment contracts to ensure compliance with the latest UKVI guidelines.

By way of example: consider a small construction business looking to employ one skilled worker as soon as possible and for a duration of three years as their graduate visa is due to expire shortly.

To this end, the business applies for a sponsor licence on 1 February 2025 costing £536 and priority service fee of £500 to expedite the processing in view of the graduate visa’s expiry date fast approaching.

Once the licence is granted, it assigns a CoS to the sponsored worker costing £1,331 (£1,092 for the ISC and £239 for the CoS fee). It also pays £827 for the visa application fee and £3,105 for the immigration health surcharge (IHS) on behalf of the sponsored worker.

If the worker resigns before completing their contract, the employer may only recover the visa application and IHS fees under a clawback clause, leaving £2,367 as an unrecoverable cost.

UKVI’s compliance policies continue to evolve, demanding vigilance from businesses to avoid sanctions.

Non-compliance can lead to severe consequences, including the revocation of sponsor licences.

For construction businesses and other sponsors, staying ahead of these changes isn’t optional – it is essential for survival in an increasingly regulated landscape.

Clara Gautrais is a senior associate and Sean Pearce is an immigration paralegal at Fragomen.