Sponsoring a Scale-up worker?
31 August 2022
On 22 August 2022, the UK government launched the new Scale-up visa, a points-based immigration route that has been designed to help the UK’s fastest growing businesses access the talent they need to go to the next level.
As the UK continues to struggle with critical skills gaps within the domestic workforce, many high-growth businesses in key sectors such as science and technology are increasingly looking outside the resident labour market in order to access the highly skilled workers they need to maintain their growth.
The Home Office has promoted the new Scale-up route as a more flexible visa option to enable UK businesses to compete more effectively for internationally sought-after talent. However, businesses interested in utilising the new Scale-up route to bring in overseas talent should be aware of several important differences between this route and other sponsored work visas such as the Skilled Worker route.
Below, we outline four key questions employers should ask themselves before applying to sponsor migrant workers on the Scale-up route.
Does your business qualify as Scale-up?
As well as meeting the general eligibility and suitability requirements to qualify for a sponsor licence as set out in the guidance for sponsors, those businesses applying to sponsor Scale-up workers must meet additional route-specific requirements to fit the Home Office’s definition of a qualifying Scale-up employer.
To qualify as a scale-up which can bring workers into the UK, you must be able to show the Home Office that your business has experienced high growth in the three-year period immediately before applying to sponsor workers. In this 3-year period, your business must have:
- Grown by 20% on average in each year in either employment or total sales (turnover)
- Had at least 10 employees at the start of the 3-year period.
To assess whether your business meets this definition, the Home Office will securely access and check your Pay As You Earn (PAYE) information and/or VAT returns you have submitted to HMRC.
If you cannot provide evidence that your company meets the above criteria to qualify as a Scale-up, your business should consider applying to sponsor workers under an alternative route, such as the Skilled Worker route.
How could the 6 month rule impact your business?
A key benefit that comes with this route is that Scale-up workers only require sponsorship from an employer for the first 6 months of their permission.
During this initial 6 month period of sponsored work, Scale-up workers cannot change employer unless they apply to update their visa. However, after 6 months they are free to change jobs or become self-employed without having to tell the Home Office.
Although this is intended to offer greater flexibility to the visa holder and simultaneously help employers attract highly skilled workers with a more competitive visa offering, there are some downsides to the 6 month rule for employers.
A primary concern for many employers will be how this rule could impact staff retention. Employers may be reluctant to invest time and money into recruiting a highly skilled worker to help grow their business only for that employee to leave for a new job after 6 months.
However, once you have secured a Scale-up sponsor licence it is valid for 4 years and you will be able to sponsor other Scale-up workers during this time. It is therefore important to note that you must comply with your sponsorship duties throughout the lifetime of your licence, even if you are no longer actively sponsoring any workers. This could be seen as an inconvenience for an employer who recruited just one or two Scale-up workers yet is still required to maintain a licence for 4 years despite only sponsoring the workers for 6 months.
Will your business need to recruit workers from overseas long-term?
The Scale-up route is classified as a ‘Temporary Worker’ route for sponsor licencing purposes. This means that the Home Office does not intend the route to be used as a long-term solution for sponsoring migrant workers and it has been designed specifically to help employers access a wider pool of talent during a critical stage of their company’s growth.
For this reason, unlike most other sponsored work routes you cannot renew your Scale-up licence beyond 4 years. If you wish to continue to have the option of sponsoring overseas workers after this period, you must apply to be licensed on another route (for example, Skilled Worker), if you have not already done so.
Scale-up vs Skilled Worker: Which option is best for your business?
If your business is experiencing a sustained period of high growth and you are able to evidence this to the Home Office, the Scale-up route may seem like the most natural choice when it comes to recruiting overseas workers. However, for some employers the long-term benefits offered by alternative routes such as the Skilled Worker route may outweigh the immediate benefits of the Scale-up route.
Employers using the Scale-up route can benefit from significant cost savings as it is classified as a ‘Temporary Worker’ route and is therefore subject to lower sponsorship fees. The Immigration Skills Charge (ISC) also does not apply to the Scale-up route, allowing businesses to save potentially thousands of pounds compared to the Skilled Worker option. However, you will need to pay your Scale-up workers a higher salary (at least £33,000 per year or the ‘going rate’) compared to Skilled Workers where a lower salary threshold of £25,600 applies.
Choosing to sponsor your employees on a Skilled Worker visa also means they are more likely to stay with your company longer term, as Skilled Workers are ‘tied’ to their sponsored job for the duration of their visa. For example, a Skilled Worker issued with a Certificate of Sponsorship (CoS) for five years must apply for a new visa if they wish to change jobs or employer during that five-year period.
When determining which route is best suited to your business, a critical deciding factor is whether you are already an approved sponsor or not.
If you already hold a valid licence to sponsor workers, you can apply to add the Scale-up route to your existing licence. However, if your business is already approved under the Skilled Worker route, you may wish to save yourself the headache and simply opt to sponsor the worker under this route instead.
If your business is not yet an approved sponsor and you simply wish to recruit a small number of highly skilled migrant workers to take your business to the next level, applying for a Scale-up sponsor licence could be the most cost-effective option.
However, if you think your business will want to sponsor migrant workers beyond four years, applying for a Skilled Worker sponsor licence will prepare your business to recruit overseas workers in a wider range of occupations compared to the Scale-up route which is tailored towards a more limited selection of highly skilled roles. Although a Skilled Worker sponsor licence is more expensive to obtain and maintain, it could offer your business greater flexibility for your future recruitment drives.
First steps to becoming a Scale-up sponsor
If you have carefully considered the above points and wish to proceed with applying for a Scale-up sponsor licence, or if you require more advice on the best sponsorship routes for your business, Smith Stone Walters can help.
Our dedicated Sponsor Licencing team can talk you through your options and assist with every stage of the process from initial application to ongoing compliance. To find out how we can help, please contact us today.