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On 5 March 2026, the Government laid before Parliament a wide-ranging Statement of Changes in the Immigration Rules, alongside updated sponsor licence guidance. These changes coincide with the Home Secretary’s speech on immigration reform and collectively represent a significant package of immigration changes. This article summarises the changes that are most likely to impact businesses.
Our separate article focusing on the other changes can be found here: March 2026 immigration update: key changes for individuals and families.
Sponsor Licence and Sponsored Work visas
The combined effect of the new changes represents a significantly stricter compliance environment. The top ten changes are as follows:
1. Employment rights notification: Many businesses will already comply with this employment law requirement, but sponsors must now inform all sponsored workers of their employment rights. This includes informing sponsored workers of the National Minimum Wage, working time rights, pension auto-enrolment, statutory leave and pay, health and safety, trade union rights, equality protections, and grievance procedures.
Sponsors must now also retain evidence that sponsored workers have been given this information, as a failure to retain this documentation is now a breach of sponsor duties.
A comprehensive employee handbook should satisfy this requirement. However, the sponsored worker must sign a declaration confirming that they have received the handbook. Please let us know if you do not have any such informational documents concerning employment rights, as this would constitute a breach of employment law and must be rectified urgently.
2. Right to work checks for non-employees: The obligation on sponsors to check the legal right to work now expressly applies to individuals who are not direct employees. This means that anyone who is working for a sponsor, whether directly or indirectly, must undergo a right to work check to confirm that they are permitted to work in the UK. Accordingly, sponsors that engage self‑employed workers, contractors, agency workers, labour supply arrangements, and similar models should immediately review their processes and carry out right to work checks on all non‑direct employees. A failure to do so now constitutes a breach of sponsor duties.
3. Lower enforcement threshold: The Home Office can now act, including by suspending or revoking a licence, where it reasonably suspects a breach has occurred, is occurring, or is likely to occur. Previously, action required evidence of actual failure. This is a material lowering of the threshold.
4. Revocation does not require deliberate breach: The revised guidance now confirms that revocation grounds do not require breaches to be deliberate or made knowingly. Inadvertent or administrative failures can still lead to revocation. Sponsors cannot rely on good faith or lack of intent as a defence.
5. Regulatory registration: A new mandatory ground for refusing or revoking a sponsor licence has been introduced. It applies where a sponsor is required to hold a regulatory registration or licence in order to operate legally, but does not hold the required registration or licence.
6. Pay period compliance: From 7 April 2026, sponsors must ensure that sponsored workers are paid their required salary in every pay period, which must be at least monthly unless the worker’s contract specifies a different pay frequency. This requirement means that in each pay period, the salary actually paid to the worker must meet or exceed the hourly going rate for their sponsored role.
This change is designed to help the Home Office swiftly identify any salary underpayments. It aligns with the ongoing data‑sharing arrangements between the Home Office and HMRC, which allow pay information to be monitored through PAYE references.
In practice, for the vast majority of sponsors, this means that whenever an employee is away on maternity leave or long-term sick leave, this must be reported promptly on the Sponsor Management System so that the Home Office is aware of the context behind the reduction in salary payments.
7. The “eligible role” test replaces “genuine vacancy”: The concept of “genuine vacancy” has been replaced with a new defined term: “eligible role.” The definition has four limbs, stating that the role must:
a) Exist at the point the Certificate of Sponsorship (CoS) is assigned, or be reasonably anticipated to exist by then;
b)Require the jobholder to perform the specific duties, responsibilities, and hours as stated on the CoS;
c)Meet all visa route requirements including skill level, salary, and compliance with the National Minimum Wage Act and Working Time Regulations;
d)Be appropriate to the business in light of its business model, business plan, and scale.
The fourth limb, business appropriateness, is new and particularly significant. It gives the Home Office express authority to challenge roles at small, new, or thinly resourced businesses. Assigning a CoS for a role that does not meet the eligible role definition will now result in mandatory refusal of the worker’s application and revocation of the sponsor licence. There is no longer any discretion.
8. UK/India trade agreement, Service Supplier route: The Service Supplier route will be updated to implement the UK/India Comprehensive Economic and Trade Agreement, with an annual allocation of 1,800 places for Indian nationals in three categories: traditional chefs, classical musicians, and yoga instructors. This takes effect on 25 March 2026.
9. Secondment Worker: The qualifying period of overseas employment for the Secondment Worker route is being reduced from 12 months to 6 months, giving greater flexibility for businesses with high-value contracts or investments worth at least £50 million. This takes effect on 8 April 2026.
10. Indefinite Leave to Remain (ILR), English Language Requirement Raised to B2: The English language requirement for ILR is being increased from CEFR level B1 to B2. This will only apply to ILR applications made on or after 26 March 2027. This transitional period gives applicants one year to prepare for the higher standard.
These are significant changes, but they are manageable with the right preparation. However, it is undisputable that the margin for error in immigration sponsorship has narrowed significantly. The Home Office can now act on reasonable suspicion, as revocation no longer requires deliberate or knowing breach. While at the same time, the record-keeping obligations on sponsors have expanded materially. The consequences of compliance gaps are immediate, severe, and can be triggered by administrative oversights as easily as wilful non-compliance.
We strongly recommend that employers review their sponsorship processes, ensure documentation is up to date, and confirm that their systems can withstand Home Office scrutiny. If any issues are identified, it is much better to be proactive in corresponding with the Home Office than reactive and to avoid the Home Office identifying the issue first. We are advising employers to take three steps now:
- First, review and update internal compliance processes to reflect the expanded record-keeping and reporting obligations.
- Second, ensure that right to work checks are being carried out and documented on all workers, including those who are not direct employees.
- Third, identify any sponsored employees who may need support meeting the B2 English language standard by March 2027.
We are here to help with compliance reviews, process audits, and strategic planning. Should you wish to discuss any of the issues raised in this article, please contact Madni Chaudhary or Lynsey Blyth.