How to navigate the UK’s immigration compliance nightmare

The United Kingdom’s current government has ended up restricting high-skill immigration as part of its larger drive to decrease all immigration. While it pays lip service to being a startup hub, we just published an article examining how one promising high-profile startup, Metail, has been cut off from hiring more key workers over a rather dubious set of accusations by the Home Office.

In this article, we’ll take a closer look at the regulations themselves, and what founders need to know to avoid the many potential pitfalls put in their way — using Metail’s situation as the case study.

The Home Office’s guidance document for employers sponsoring workers on Tier 2 (general employment) and Tier 5 (temporary work) visas runs to 207 pages. It explains that Tiers 2 and 5 of the UK’s points-based system are the primary immigration routes for non-European Economic Area (EEA) migrants who wish to work in the UK. And that such migrants require the sponsorship of an organization or company which holds the relevant sponsor license. Most migrant tech workers also come into the UK via an employer on a sponsored Tier 2 visa — with only a very limited number of Tier 1 “exceptional talent” visas per year, with extremely demanding qualification criteria.

A sub-section on sponsor duties covers record keeping; reporting information and events via a dedicated sponsorship management system portal, including “non-attendance, non-compliance or disappearance” of migrants (so the Home Office can “take enforcement action against them”); compliance with UK immigration law; and the question of what is and isn’t a genuine vacancy — where the Home Office warns that the jobholder is required to perform “the specific duties and responsibilities for the job and meets all of the requirements of the tier and category.”

Examples are given of vacancies that are not considered “genuine” include those with an “exaggerated or incorrect job description to deliberately make it appear to meet the requirements of the tier and category when it does not”, and job adverts with requirements that are “inappropriate for the job on offer, and have been tailored to exclude resident workers from being recruited”.

On legal compliance, the Home Office warns sponsors they must “only employ migrants who are appropriately qualified, registered or experienced to do the job” and must “not employ migrants where they don’t have the experience or permission to do the job in question, and stop employing any migrants who for any reason are no longer entitled to do the job”.

“We may check sponsors at random,” it warns. “If you are checked, it does not necessarily mean we have doubts about your compliance as a sponsor. We may make these checks before we make a decision on your license application or after your license has been granted, during the validity period of your license. These visits can be announced or unannounced.”

In Metail’s case the visit was unannounced. On the morning they arrived both people the Home Office needed to talk to were not in the office. The compliance officers sat and waited until lunchtime for the HR manager to rush back from Cambridge where she had been working.

“The whole point of that unannounced visit is to catch you out if they can,” says Lucia Gillet, Metail’s HR & finance manager, who was directly involved as the listed key contact for the sponsored visa in question. “Just giving us a few hours notice would have made everyone much calmer.”

There was no notice, and no niceties.

“They gave me the list of documents that they needed and all that they wanted from us. Which is a really long list. There was no, like, introduction or anything like that. It was all very much like we’re here, we need this from you, this, this, this, this, this, this, this, y’know. It was quite a bit of a day!” 

“We were two weeks before moving into another office. So June, July, August dealing with all these huge changes in the company and then moving the office and doing everything else on top of it. Instantly there were things I had to drop or postpone. So just giving me the time — literally a few hours to prepare — would have taken the stress away from it. Because we had nothing to hide,” she adds.

By the end of the day Gillet had managed to extract an unsatisfying answer for why they’d been chosen for an audit.

“They said this is because of our request to renew a license — which happens every five years. It was back in February or March that I requested for the license to be renewed — which is an online process, you make a payment, it is fairly simple and straightforward and there was no indication that there might be — you know, that that hasn’t happened or what else that’s involved in it or anything.”

However, surprise, random audits appear to be the new norm.

“I tell all my clients that they should expect to be audited at least once every four year cycle because a license lasts for five years but is renewable every four,” says Charlie Pring, a senior counsel who specializes in immigration work for law firm Taylor Wessing (which, to be clear, wasn’t involved in advising Metail). “So every sponsor should expect it.”

The Home Office’s decision to revoke the sponsor license fixed on one Metail employee — who we’re calling Alex. This person declined to be interviewed for this article, saying they did not want to do anything that could jeopardize their family’s time in the UK.

We also contacted the Home Office with questions about the challenges that the compliant environment policy poses for UK startups. At the time of writing it had not provided comment.

The contention that emerged from the Home Office sponsor compliance unit — first, on the day of the unannounced visit, when they asked to see documents and conducted interviews with staff; then as a stated accusation at the point of suspending the license, when they laid out their case; and finally as decisive grounds for terminating the license — was that the job Alex was doing, which Metail had classified as an IT specialist manager, did not fulfill the criteria for the Standard Occupational Classification (SOC) code attached to the Tier 2 visa.

“Their stance became ‘we believe that you’ve overinflated their job to employ them so the job they’re doing is not as skilled as it should be’,” says Metail CEO Tom Adeyoola. “The thing is, I’ve got 40 employees. So you’re basically saying that we’re lying to overpay somebody to do a job that they’re ‘not doing’. So, pretty hardcore.”

The specific accusation was that Metail had exaggerated the skills level of the role being performed by Alex in order to hit the Tier 2 requirements that a job be at a certain skills list — working from a Home Office list of codes of practice for skilled work — when the actual work being done, as they assessed it, was at a lower skill level that would not have qualified for such a visa. Hence this person shouldn’t be working in the UK at all.

The case was compounded by Metail not being able to provide all the CVs that they had received when, as part of the process for obtaining the Tier 2 visa, they had run adverts for Alex’s job role back in 2017.

Advertising the role is currently a standard requirement of the Tier 2 visa process, that’s known as the resident labour market test (RLMT), with an exception if a job is on a shortages occupation list. (Alex’s job was not.)

This is because UK immigration rules require that settled workers be given priority for vacancies over migrant workers if they have the necessary experience and skills.

So the Home Office wanted to see all the CVs Metail had received when performing this test — despite it having previously gone through the RLMT process in order to obtain the visa. The compliant environment means there can always be further future checks.

However, in the interim, new European data protection legislation had come into force, in May 2018. So staff had purged CVs thinking it was necessary to comply with the General Data Protection Regulation (GDPR).

In fact, confirms Pring, immigration law takes priority in this scenario. Employers may, in fact, need to hold relevant CVs for up to seven years. “From a GDPR perspective [deleting CVs is] absolutely the right thing to do,” he says of this error, dubbing the RLMT “a disaster” where GDPR is concerned.

“They’d complied with one law but fallen foul of another. GDPR and the resident labour market test are two completely inconsistent requirements. It’s just that if you’re weighing them up it’s much more important to comply with the Home Office than it is with the GDPR. But how are you supposed to know that?”

When compiling their response to the Home Office suspension letter, Gillet did actually manage to retrieve some of the deleted CVs — via an account that had been used to advertise the role on a commercial job-board. But the other jobs site they’d used to advertise the role — ironically, a government jobs portal — had since closed down so there was no way for them to retrieve the data.

The Home Office decision letter highlights this lack, noting, complete with a reproachful underline, that “CV’s and interview notes for some of the shortlisted applicants were retained” — before dialling up its main argument: That the RLMT had not been “fair and open” but was rather carried out “disingenuously” and only “as a paper exercise with no genuine intention of offering the position to a resident worker” — objecting to what the letter couches as Alex’s “obvious involvement” in the recruitment exercise for a job they were already doing at the point the role was advertised.

At that point, Alex was working at Metail on a ‘youth mobility scheme‘ visa — which lasts for up to two years but was, by then, due to expire soon. Their work had impressed Metail. They’d quickly gained promotion to the specialist IT manager role. Being able to stay and keep working required a new visa — and, specifically, that they meet the skills criteria of the Tier 2 visa.

UK immigration law gives settled workers able to do the job priority. So compliance becomes a question of assessing the work a job entails and assessing every available settled worker’s capability to do that work. Highly specialized startup roles clearly complicate this process.

Unsurprisingly the Home Office zeroed in on Alex’s lack of formal ‘IT’ education. 

“The assumption is that there should be no reason for you to hire a migrant at all,” suggests Adeyoola. “The weird thing is, as an employer you’re like, we’ve got somebody who’s employed already, they’ve become expert in their job so naturally you want that person to continue… but to do that you have to go through hoops.”

Hoops is not how the Home Office sees it, though. Their evidence for Alex’s “obvious involvement” in recruiting for the role they’d already been promoted into based on the quality of their work includes an email sent to several Metail staff and a firm of solicitors it was using, in which Alex signals agreement with “actions discussed” and with the job being posted that day.

“Although the representations state that the outcome of the RLMT was not predetermined, the documents provided to our officer strongly indicate that this was not the case,” runs the Home Office decision letter. “In the absence of any other information, we maintain our assertion that the RLMT carried out was not a fair and open one.”

This is a scenario that Pring has encountered before.

“You have the potential problem when you’re doing the resident labour market test when the Home Office come in and they have a predetermined idea that the business has favored the candidate who was already working for them and almost went into it with a closed mind — genuinely didn’t look for local workers because they just wanted the person they already have on the books. It’s very difficult to try and undo that,” he says. 

“It’s easy for them to say well you didn’t really put your mind to it properly because you already had this person in post and you just wanted to confirm it. So it’s a real challenge. The compliance aspect to it is a real problem so I always tell clients that getting the visa is only half of the picture; keeping the visa by trying to say on top of all these compliance duties that the Home Office impose on you is — if not equally — almost more important than getting the visa in the first place.

“Because if they pull the rug away later on it’s not just the one employee who loses the visa — it’s everyone who’s on a visa. So you can have a whole handful of your key people who overnight lose their jobs. So real problem.”

There is no standard appeals route for revocation of a sponsor license. Short of paying for judicial review, which Pring says “costs of tens of thousands of pounds and is unlikely to be successful anyway”.

Which means the Home Office really is free to play judge and jury over employment assessments — and the same civil servants who are trained and rewarded for box-ticking compliance are in charge of nuanced assessments about whether a particular startup job role matches the SOC code assigned to it from a standardized list of occupational classifications, at the same time as their political overlords are pledging to shrink net migration.

Of course it’s not hard to see the disconnect between a ‘standardized’ conception of work vs dynamic startup jobs that are subject to fast-flowing change and often involve very new and novel techniques and technologies. For startups, just figuring out what SOC code to assign a job role can be a nightmare in and of itself.

“It’s very hard to match them up — certainly also from our past experience — to tech because they’re quite out of date and they don’t fit startups that well. So you end up in quandary of this versus this versus this,” says Adeyoola. “If you’re a startup guy sitting outside this you can look all you like at the difficulties of the SOC codes. But the hard things is — because we tried it in the past — if you call up the Home Office and say we think this is the right SOC code for our person, is that correct? They’re not allowed to tell you!

“So we’re just basically throwing at a dartboard with blindfold and hoping it’ll hit the right mark — and then if we don’t hit the right mark you’re going to penalize us for it.”

Gillet, who was not involved in the original visa application for Alex but dealt with the Home Office from the point of audit onwards, says there were at least two SOC codes that they could have assigned to the role.

“We gave them a reason why we went with one rather than the other. And they just dismissed it — that’s what they built the case on,” she says, recounting the Home Office’s response to follow-up representations. “This is the problematic bit because it’s difficult to go into explaining something this specific. Not even everyone within the company fully understands — if you work in a different department you will not fully understand the bits and pieces that goes in.

“So bearing that in mind we gave them information that we would to someone that is not expected to know all the details and the technical aspects of the job so that they actually understand what it is. Which might then look much simpler.”

She wonders whether trying to present an “understandable” view of the work required by the job role so it could be grasped by a non-technical audience was a misstep — allowing the Home Office badge the job less technical than the visa required. “I don’t know. This is just my interpretation,” she says. 

“Part of the problem with the system [is] it’s almost a skepticism towards employers,” says Pring. “Rather than what I prefer is a collaborative approach where you try and help them through it. That problem of, to be honest, untrained civil servants or enforcement officials trying to take a view on what a skilled technology person is or isn’t doing — that’s obviously a concern.”

“Paper trail is essential,” he adds. “The truth is becoming a sponsor puts a higher standard of compliance on the business than if they’re not. So all the things that they would get away with if they weren’t a sponsor suddenly can be put under the spotlight — so having really strong paperwork on personnel files, signed employment contracts, up to date job descriptions, fully signed right to work checks — all the things that, to be honest, a startup is less worried about when they’re doing all the other jobs they need to do.

“You’re under the magnifying glass. They will look at everything that you do or don’t do — and unfortunately do it with a punitive attitude which is the problem.”

Additional documentary evidence of Alex’s work which Metail provided in response to the suspension included product requirement documents; training materials; meeting notes and presentations; peer review tracking spreadsheets; dashboards; bug tracking support tickets; and more.

The Home Office decision letter provides a brief description of each item, in a style akin to an alien encountering a piece of human material for the very first time, and then segues into systematic negation — saying it is “not clear” from the document’s contents whether that person took the lead on a particular project or what part they played in the production of the document — and so, inexorably, to an overarching conclusion that Metail has “failed to show” this person is doing the job attached to their visa.

“I don’t think people actually know currently how these rules are enforced because it’s enforced as the Home Office sees fit to enforce it,” says Adeyoola. “It made me a bit worried actually — thinking like 1984, this sense of like well if you ever get into trouble the government’s not on your side. The government can be a totally dehumanized entity which was really shocking and surprising to me.”

Again, it’s not hard to see how ill-fitting job classification codes can feed negative decisions about whether or not work is skilled enough to qualify, especially in the politically charged ‘compliant environment’ around immigration. The asymmetry of the system also allows for any evidence provided in the short time allocated for “representations” to be summarily dismissed as not evidence enough. And for very strict action requirements and deadlines to be extracted from sponsors, while the Home Office runs to unspecified timelines and issues missives as self-servingly opaque and undefined as they wish. 

“They came back saying the evidence, the pieces of work that [Alex’s] done, that are documented, and they’re listed in them as a project owner, that that doesn’t actually explain to them their part in that project,” says Gillet. “If someone is a project owner it — to me — that seems self-explanatory, that they manage their projects, they are aware of everything that’s going on, they’re not just administrator.

“That’s what the suggestion was, basically — that we didn’t specifically explain what ‘project owner’ means.”

“Within the entirety of the documents provided as part of the representations, there is only evidence to show that [Alex] has had some minor involvement in a planning meeting; collected some photographic evidence; owned a product, although it is not clear what this involved; and has undertaken some user acceptance testing,” is the Home Office’s narrow summary.

“How do you answer that?” wonders Adeyoola. “Film them doing documents and then send the video footage?! I don’t know what you’re supposed to say to that. Again it’s this guilty until proven innocent point.”

“The leap from this document isn’t there or we can’t see this so therefore you’re doing a crime is extraordinary,” he adds, recounting another instance where requested scans of bank statements — to prove receipt of stated salary — were summarily rejected because the Home Office said the small print wasn’t legible. No second chance to rescan and send; just nothing. 

Its final decision letter does not literally call for video evidence of qualifying work — but the burden of proof it says would have been required is suddenly now two-fold. And this previously unstated dual requirement is used as a lever to condemn the documents Metail did provide — by saying they failed to provide a secondary layer of supporting evidence to back up those primary sources.

“Whilst we would not expect to see [Alex’s] name on every document, we would expect documents to be supported by some corroborating evidence, such as email communications, attributable to [the worker in question] or evidence of [their] schedule/arrangements for face-to-face meetings, training sessions, or business trips,” it writes.

The earlier suspension letter offered no such specifics — containing only a bland observation that Metail could submit “evidence of work completed in line with the role described on [Alex’s] CoS”.

The official Home Office guidance for sponsors also fails to include a useful level of detail on this point.

In a section on license suspensions, the Home Office reiterates the same sphinx-like line about submitting “supporting evidence”, writing: “This is your opportunity to seek a review of our decision and to set out any mitigating arguments you believe exist. Your response to us must be made in writing and set out, with supporting evidence, which grounds you believe to be incorrect and why.”

The question then is how can a sponsor comply with the ‘compliant environment’ if the Home Office does not provide adequate information on exactly what’s required? It’s almost as if the system is being set up for sponsors to fail by requiring they leap an invisible compliance bar. Pick the height you think it’s being set and jump to it.

“The resident labour market test is… made up to fulfill a purpose but it doesn’t. It just fails at what it’s trying to achieve in the first place,” argues Gillet. “That on its own it’s such a dysfunctional part of the whole process — which then puts the whole process that the Home Office set up as being dysfunctional.”

“The truth is it’s incredibly difficult to pass an audit without any issues arising at all because there are so many things that you’re being tested against,” agrees Pring. “In terms of personnel files and reporting duties. Tracking of employees — so it’s very difficult to comply. And then what you have to try and do is to show compliance at that audit or after the event in writing.

“The difficulty is then of course the audit’s already happened so you’re a little bit on the defensive trying to undo things that have already happened, findings they’ve already made. So it is a challenge.”

“There are no concessions or workaround for small companies; you have the same bureaucracy as a large company. You don’t get an easier ride just because you’re a handful of people and you’ve got great plans. You’ve got the same set of rules — both for compliance and for timing as well. And of course it’s more difficult for startups that just are so stretched across the business to go chasing around doing all the various things that the Home Office want them to do to meet their sponsor system,” he adds. 

Penalties for employing an illegal worker that the Home Office lists in the official guidance range from a sponsor license being revoked; to civil penalties per illegal worker employed; to prosecution — in cases where it deems a sponsor “knowingly” employed an illegal migrant worker — which, on conviction, can carry a sentence of up to two years in prison and/or an unlimited fine.

An employer can also be disqualified from acting as a company director.

“It just feels like a complete waste of time,” says Adeyoola. “The whole argument recently about the new immigration laws is to move to a £30k minimum [salary for skilled migrants]. So under the new rules there wouldn’t be an issue [for Metail to employ Alex, who was paid more than that minimum]. Even though people are complaining — like ‘£30k why should that mean skilled? There are lots of skilled people who earn less than £30k.’ Not according to the current way we do it!”

“If I think about it, right, I’m a tech company paying high wages to people on visas. One of whom, Yu Chen, is probably one of the top ten people in his field in the world. Exactly that. Why are they putting resources against me? Rather than, I don’t know, a farmer or a fairground attraction or rents company who might be hiring loads of undocumented workers?” he adds. 

“I’ve dealt with the Inland Revenue, HMRC, several times on different issues at different companies and they are human and they can understand the difference between, basically, interpretation and people trying to find their way and mistakes vs deliberate criminal activity… They’ll be even-handed. It’s not the case with the Home Office at all.

“Hence you can really understand how Windrush happens. And why it’s still not resolved. It is a machine. It’s like a robotic machine with no human sense to it. I think that’s all Theresa May.”

With that, we’ve put together eight points to keep in mind for any UK startup that is dealing with the immigration system.

1. Don’t expect the Home Office to help you understand and navigate their system

The language of the ‘hostile environment’ may have been toned down a little since Theresa May left the  Home Office but it is still approaching its task of overseeing immigration rules with an inflexibility of approach that serves up the same frosty reception.

Don’t expect the department to offer help or support to understand how to comply with the rules or its compliance assessments to give you much if any benefit of the doubt, even when a mistake is genuine.

Digest the official Home Office guidance for sponsors — but be aware it’s just a list of duties, not a comprehensive guide on how to comply.

It certainly does not contain an exhaustive list of compliance requirements for every situation the system might throw at you. Be prepared to go above and beyond. Such as if you are asked to provide “evidence” to counter a suspension of a sponsor licence. The standard of evidence required is very high — though that is not explicitly spelt out in the guidance.

2. Plan for a longer timeline on hiring than you’d like and structure business around those longer timings 

The Home Office applies strict deadlines to sponsors but its own timings, requirements and decisions can be pretty fuzzy. Visa related processes can end up taking longer than you expect.

In Metail’s case they had to run a resident labour market test twice after the Home Office said it couldn’t see date stamps on the original documents. So a full 60 days of advertising — rather than 30.

Business plans that don’t bake in enough time for hiring risk burning resource through any unforeseen delay.

Notice periods for migrants who are already in the UK can also add additional months to a hiring timeline as it’s risky for these candidates to give notice to a current employer until they have the new visa with the new sponsor.

3. Invest in a HR function that can stay on top of ongoing compliance admin

A compliant environment demands fastidious attention to up-to-date record-keeping. This means you need a dedicated HR resource that’s able to keep on top of all the paperwork and reporting duties that the Home Office expects. Ongoing admin like managing personnel files and policies to ensure they have the correct contact info and consents; having signed employment contracts, up to date job descriptions and fully signed right to work checks is vital. 

Scaling startups may also need to manage a transition from a basic system of record-keeping when they only had a handful of personnel to a scalable HR system that can keep track of staff as they grow — and do so without dropping the ball on any of the compliance requirements during the switch over.

There are companies that can act as agencies to handle sponsorship management. Determine whether you’re comfortable outsourcing compliance to a third party or prefer to invest in an adequately resourced internal HR function to manage all the necessary systems and processes. Startup priorities change all the time but your business need to be able to dedicate consistency to this task.

As a sponsor you should expect — and be prepared — to be audited by the Home Office once every four years. Including without warning.

Making relevant staff aware that such a check is likely to happen and letting them know what to expect ahead of time might sound excessive but could help the day go more smoothly and be less stressful.

4. Consider taking legal advice, especially if you don’t already have experience of the system

There’s no doubt that visa sponsorship and immigration compliance is a bit of labyrinth. The rules and requirements around visas also change pretty often so there’s lots to stay on top of. It’s easy to make inadvertent mistakes.

Legal requirements attached to different UK laws can also create compliance conflicts — such as data protection vs immigration record-keeping requirements.

Seeking professional legal advice early can reduce the risk of problems later on, though of course there is a cost attached to getting advice

5. Be aware of changing immigration risk as your business grows

Tier 2 visas are connected to the business’ sponsor licence — so if you employ several people on these visas you need to be aware of any changing compliance risks that relate to your particular combination of hires.

If the Home Office takes issue with any one of your employment decisions, and decides to revoke your licence, it will most likely affect all other employees you are sponsoring.

Bottom line: You could lose a bunch of personnel overnight.

You may need to carefully consider the risk of sponsoring less business critical staff if you have critical employees on sponsored visas. The risk of losing a person who is vital to your business may simply outweigh the benefit of sponsoring less essential workers, however great they may be.

6. Talk to other founders to learn from their experience

The hostile environment has made plenty of people afraid of the Home Office. The best way to tackle that fear is to be prepared by better understanding how the department operates. So talk to as many people who’ve been through an audit as you can.

Get into groups with other founders, find the people who’ve already been through a compliance check, and ask them what they’ve done. Stories can reveal what’s written between the lines of the official Home Office guidance. 

7. What to expect on the day of an unannounced check

Expect the visit to last several hours — or even a full day, depending on the size of your company. The compliance officers may ask to interview any sponsored migrants you employ there and then and will also want to talk to the key contact listed on their visas.

Those being interviewed will be informed at the beginning of the process that they are allowed a break every two hours.

Expect to have to provide documentary proof to back up everything you’re saying — from your office lease to prove that the building you’re standing in is indeed your office, to signed and up-to-date employment contracts of the relevant workers, to copies of their bank statements to prove you are paying them what you say you are.

A list of all the documents the Home Office want will be provided up front on the day.

Questions during interviews with staff will be structured so won’t always feel logical or relevant. It certainly won’t be a conversation.

The tone will be formal and neutral but may feel confrontation and even aggressive — given they’ll be asking, indirectly, that a sponsored employee justify their employment, seeking to quantify their skill level and questioning what qualifies them to do the job and why a settled worker was not hired in their place.

8. Don’t forget to be human

Look out for your people. The stress of undergoing a compliance check can cause serious anxiety for the affected individuals who may be worried for not just their own future but also their families. This may well impact their ability to work throughout the entire process — so potentially for months. They will need your support.