UK immigration fees are substantial. If your organisation employs or sponsors migrant workers, you may offer to fund certain immigration, visa or sponsorship fees on behalf of the worker as part of the pre-employment negotiations.
If you do take on immigration costs for a worker, what are your rights if the worker leaves your organisation, or what if they don’t actually take up employment with you? Can you, as the employer, recoup the immigration fees you have funded?
The following practical guide for employers and sponsor licence holders looks at the law on clawing back immigration costs from migrant workers.
UK visa & sponsorship costs
There are several, substantial costs associated with sponsoring a migrant worker under the various different immigration routes, where some of these costs are the sole responsibility of the sponsor licence holder, while others are usually the responsibility of the sponsored worker.
For the sponsor licence holder, the costs of sponsorship can depend on the size of the organisation and the type of licence sought, but can include the cost of:
- the initial application for a sponsor licence (either £536 or £1,476)
- using the priority service for expedited processing of a licence application (£500)
- applying to renew an existing sponsor licence after 4 years (the same as first-time round)
- applying to extend the scope of any existing licence (an additional £940 in some cases)
- the endorsement fee for a Scale-up sponsor licence (£1,500 excluding VAT)
- using the premium sponsor service (either £8,000 or £25,000)
- asking for expedited processing of a sponsorship management request (£200 per request)
- assigning each Certificate of Sponsorship (CoS) (either £25 or £239)
- the immigration skills charge, where applicable (either £364 or £1,000 per year)
- an action plan to reinstate the sponsor’s licence rating (£1,476).
For the sponsored worker, having been assigned a Certificate of Sponsorship (CoS), they will be liable for the cost of applying for their visa and, where applicable, the immigration health surcharge.
An applicant will be liable to pay the healthcare surcharge to access the UK’s National Health Service if they are applying for a work visa from outside the UK for more than 6 months or if applying for a visa from inside the UK for any length of time. However, the surcharge is not payable in certain circumstances, for example, if an individual is applying for a Health and Care Worker visa or indefinite leave to remain on one of the work routes.
Additionally, as part of an application for a work visa, and unless the sponsor is prepared to certify maintenance on the applicant’s CoS, the sponsored worker may need to show funds to meet any financial requirement under the rules. For example, for a Skilled Worker visa, the applicant would need to show funds of £1,270 when applying for entry clearance to the UK or to switch from a different immigration route from within the UK but have lived there for less than 12 months. For an applicant who has already lived in the UK for 12 or more months on a valid visa, they will no longer need to meet the financial requirement.
Importantly, all of these costs are in addition to the visa application fee, which can vary depending on the work route. For example, for a Skilled Worker visa the standard fee ranges from £719 to £1,500 based on the worker’s circumstances. There may also be an additional fee to expedite the issuance of a visa where time is of the essence. When using the priority service, for a visa decision within 5 working days, the cost is £500. For a decision the next working day, using the super priority service, the cost is £1,000.
Can employers recoup visa, sponsorship or immigration costs from workers?
When it comes to those costs for which the employer is solely responsible, such as the cost of applying for a sponsor licence, as well as assigning Certificates of Sponsorship and paying the immigration skills charge, these costs should not be recouped from the migrant worker. These are costs that are levied at the employer and form part of the overall sponsorship process. The sponsorship guidance issued by UK Visas and Immigration (UKVI) also makes it clear that collecting the immigration skills charge from migrant workers is prohibited.
If an employer attempts to recoup these costs from a migrant worker, it is likely that compliance action will be taken again the employer by UKVI. These are costs that form part of the overall sponsorship process and should be borne by the employer. If action is taken, the employer could have their licence suspended, downgraded or even revoked. Under Annex C2 of UKVI’s online guidance on sponsor duties and compliance, one of the circumstances cited in which UKVI will normally revoke a licence include where the worker has been asked or required to repay some or all of the immigration skills charge.
However, as an incentive to overseas talent to relocate to the UK, many employers will often offer to pay the worker’s visa costs, as well as those of any dependant’s accompanying the worker, in addition to their own overall sponsorship costs. In these scenarios, it is entirely understandable that the employer would want some form of protection in place to recoup these costs if the migrant worker has a change of heart or chooses to resign after just a few weeks or months. Indeed, many UK businesses are increasingly look to protect their investment in sponsored workers through the use of clawback agreements.
However, in respect of any visa fees paid by the employer, regard should be had not to immigration law, but rather to the different principles arising under common law in the UK. This is because, under UK common law (case law), it is possible that a worker could argue that any repayment obligation is either a penalty or an unlawful restraint of trade:
- the rule against penalty clauses in the event of breach of contract: the common law provides that any contractual clause which provides for an amount to be paid by someone that amounts to a ‘penalty’ for breach of that contract, will not be enforceable if it imposes a ‘detrimental obligation’ which is ‘out of all proportion’ to any legitimate interest of the employer. This would be relevant, for example, where a migrant worker has a change of heart, in breach of the contractual obligation to start their new role on a certain date. In these circumstances, a repayment clause would only be enforceable if the amount that is required to be repaid is proportionate to the loss suffered by the employer.
- the rules around restraint of trade clauses: where there is no breach of contract, but the migrant worker leaves within a short period of starting their sponsored job role, such that the employer has not had the benefit of their investment, an immigration fee clawback provision is again not necessarily unlawful. Indeed, case law on proportionality has been well developed in the area of clauses requiring resigning employees to repay training fees paid by the employer on the basis that the training would enhance the individual’s skillset and the employer would obtain the benefit of those enhanced skills. However, to be enforceable, any clawback clause must not be so onerous that it effectively dissuades or prevents a migrant worker from resigning and, as such, amounts to a restraint of trade.
How can employers claw back immigration costs from workers?
In theory, there is nothing preventing an employer from recouping certain visa costs paid on behalf of a migrant worker if that worker fails to start their job or leaves early, however, making deductions unlawfully from an employee’s wages can result in legal claims. As such, it is important to proceed with caution when looking to make deductions, and when drafting any immigration fee clawback provision. The effect of this provision must be proportionate in all the circumstances.
For example, a sliding scale of reimbursement upon the resignation of a sponsored worker would help to avoid any attack on the enforceability of a repayment clause where, the longer their employment continues, the greater the employer will have had the benefit of their work. In any event, an immigration fee clawback provision in either a signed contract of employment or separate signed document, even if potentially unenforceable as a matter of law, may still have some value to the employer as a deterrent against early resignation.
Additionally, when it comes to any clawback clause applicable in the context of a breach of contract scenario, ie; where a migrant worker decides not to take up their new post and remains overseas, this may be difficult to enforce due to jurisdictional issues. In these circumstances, there will also be no final salary payment from which any fee deduction can be easily made. However, employers could always require a migrant worker to pay their own fees themselves upfront, while agreeing to repay those fees once the worker commences work, in this way safeguarding against any last minute change of heart.
What to include in an immigration fee clawback agreement
A clawback agreement is where express contractual provision is made for certain costs to be repaid by the migrant worker if that worker fails to commence their new role or resigns within a certain timeframe, typically set out within the worker’s contract of employment or a separate signed document. It is a legal arrangement or contract that outlines the conditions under which an employer can recover certain immigration-related costs or expenses from an employee who leaves their employment within a specified period after the employer has sponsored them for a work visa or permanent residency. This type of agreement is common in situations where an employer sponsors a foreign national for a work visa.
By having this type of agreement in place, an employer can help to ensure that the business does not have to bear the full cost of sponsorship in circumstances where they do not receive, are no longer receiving, the benefit of the worker.
The primary purpose of an immigration cost clawback agreement is to protect the employer’s investment in the immigration process. It typically specifies terms and conditions such as:
- Eligibility: It defines who is covered by the agreement, usually employees sponsored for a specific visa category or immigration process.
- Covered Expenses: The agreement identifies the immigration-related costs that can be subject to clawback. These costs can include visa application fees, legal fees, relocation expenses, and other costs directly associated with the immigration process.
- Clawback Period: This provision specifies the time period during which the clawback is applicable. It typically begins on the date of the visa approval or when the permanent residency is granted and lasts for a specified duration (e.g., one to three years).
- Graduated Clawback: Some agreements may have a graduated approach to cost recovery, meaning that the amount the employee owes decreases over time.
Triggers: The agreement outlines the conditions under which the clawback provision is activated. This may include the employee voluntarily leaving the company or being terminated for cause. - Payment Terms: The agreement details how the employee is required to repay the covered costs. Repayment may occur in a lump sum or installments and can be subject to certain conditions, like prorating the amount based on the length of employment.
- Exemptions: Some agreements may provide exemptions or waivers under specific circumstances, such as the employer going out of business or the employee experiencing a medical emergency.
Immigration cost clawback agreements are used by employers to ensure that employees do not leave shortly after obtaining their work visa or permanent residency, which could result in financial losses for the employer. However, the legality and enforceability of these agreements can vary within the specific circumstances and any such agreement must comply with employment and contract laws. It’s important for both employers and employees to fully understand the terms and implications of such agreements before entering into them.
Reclaiming visa costs from care workers
For care sector sponsors, specific provisions are made within the Code of Practice for the international recruitment of health and social care personnel in England. This Code provides that while repayment clauses can be used in employment contracts to recover some of the upfront costs that the sponsor has invested in overseas recruitment if a worker leaves employment early, the employer must abide by the following principles:
transparency: among other things, the repayment clause must be expressly set out in the contract or job offer letter, and fully explained to the candidate before the job is accepted.
proportionate costs: again, among other things, the cost must include only those expenses met by the employer on the migrant worker’s behalf. This can include the worker’s visa fees, but excludes costs that the employer is liable to pay as part of the overall recruitment process, such as the sponsor licence fee, CoS fee or immigration skills charge.
timing: the guidelines provide here that the worker must be provided with a repayment schedule. Rechargeable costs must also taper downwards with time. For example, if a worker leaves their sponsored job role within 0 to 12 months, they can be charged 100% of total itemised expenses; if they leave their job within 13 to 24 months, they can be charged 50% of total expenses; if they leave within 25 to 36 months, they can be charged 25% of total expenses; but with no repayable expenses after 36 months of service.
flexibility: the guidelines here include that employers should be flexible about when they choose to levy a repayment clause, with each decision being made on a case-by-case basis. Examples of when an immigration fee clawback clause should be waived by a care sector employer could include where the health and wellbeing of the migrant worker is being adversely impacted; the worker is leaving due to bullying, discrimination or poor working conditions; the worker’s circumstances have changed beyond their control, either in the UK or home country; or the worker is leaving for career progression reasons.
Need assistance?
As employer solutions lawyers, DavidsonMorris combine expertise in immigration and employment law to provide specialist advice on matters such as recouping visa and immigration costs from foreign national workers. If you have a question about your rights to be paid back immigration costs, such as through the use of an immigration clawback clause, contact us.
Immigration fee clawback agreement FAQs
What is the clawback clause for visa sponsorship?
A clawback clause for visa sponsorship is where contractual provision is made within the contract of employment of a migrant worker for them to repay certain immigration costs if they leave their job shortly after getting their visa.
What are the benefits of having a sponsor license?
The primary benefit of having a sponsor licence in place is that this will open up the talent pool to workers around the world, where you can sponsor migrant workers to fill any essential skills gaps in your existing workforce.
Can an employer reclaim sponsorship fees?
If agreed in writing, an employer can reclaim certain sponsorship fees, such as any visa fees paid on behalf of the migrant worker, typically where a worker decides not to take up their post or resigns shortly after starting work.
What is the cost of sponsoring a care worker in the UK?
The cost of sponsoring a care worker in the UK can be significant. In addition to the cost of the employer’s sponsor licence and assigning a sponsorship certificate, the employer may also agree to pay the worker’s visa costs.
Last updated: 24 October 2023
Author
Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.
She is a recognised by Legal 500and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.
Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals
