In recent months we have seen the authorities increase their oversight of visa related employment and general working conditions. Where organisations have been found to have fallen short of the required regulations, fines can be significant and we have seen these being issued in excess of £20k per employee. Now is the time to review your internal procedures and ensure that you have robust systems in place to monitor these arrangements. Within this insight we consider two areas which can present significant challenges to anyone engaging an employee on a work visa.
Employers have a duty under UK Home Office rules to ensure that all workers have the appropriate immigration status and are working in line with their visa conditions. Failure to comply can result in severe consequences, including civil penalties, reputational damage, loss of sponsorship licence, and even criminal sanctions in certain cases. Two common areas of risk are:
- Workers who have exceeded the validity of their visa (overstayers).
- Workers who are working longer hours than permitted under their visa (hours worked in excess of those specified by your sponsor in your Certificate of Sponsorship (CoS)).
Key considerations for organisations
- Right-to-Work checks: Employers must carry out right-to-work checks before employment begins and at prescribed intervals. These checks need to be documented, stored securely, and updated when visas are due to expire.
- Visa expiry monitoring: Organisations should have a robust system for tracking visa expiry dates and renewal requirements, with reminders in advance of critical dates.
- Working hours restrictions: Where employees are subject to capped working hours, employers must implement systems to track actual hours worked across all roles within the business (and, where possible, across group entities). This includes monitoring overtime and casual hours.
- Sponsor licence duties: Employers holding a sponsor licence have an additional duty to report changes in employees’ circumstances (e.g., role, hours, immigration status) within strict Home Office deadlines.
- Data privacy: While monitoring immigration status and working hours, organisations must ensure compliance with data protection requirements, particularly when storing employee immigration documents.
Processes you should have in place
- Centralised compliance register: Maintain a central record of all employees’ immigration status, visa conditions, expiry dates, and permitted working hours.
- Automated alerts: Use HR or compliance software to flag upcoming visa expiries or breaches in working hours.
- Manager training: Line managers should be trained to understand the restrictions on working hours and visa compliance, as they are often closest to monitoring daily activity.
- Periodic audits: Conduct regular internal audits to confirm compliance with immigration requirements, including sampling timesheets against visa conditions.
- Escalation procedures: Establish a clear process to escalate potential breaches quickly, ensuring that remedial action is taken and reported to the Home Office where required.
Engagement with workers: Proactively communicate with employees about their obligations to inform HR of changes in status, renewals, or potential breaches.
National minimum wage
The second area is National Minimum or Living Wage, where the level of complexity within the regulations can also have significant consequences for employers. Again, failure to fully comply with the regulations can result in significant financial implications including the need to repay any underpayment of earnings, exposure to penalties and reputational risk with the possibility of being ‘named and shamed’.
This is an area that is often subject to sector specific arrangements ranging from contractual sleep ins for care facilities, late night working arrangements for hospitality and catering business, and differences in rates of pay for sociable compared to unsociable hours. Below is a summary of the key considerations that you will need to consider for your organisation.
Key considerations for organisations
- Working time accuracy: Employers must ensure all hours actually worked are recorded, including travel time between client visits, time spent on handover or preparation before and after shifts. This is also where the specific sector or industry considerations come into play. How accurate are your working time processes? Do they capture all the hours that are being worked? Do they consider special arrangements?
- Pay calculations: Organisations need to calculate the hours worked as per the pay reference period, which could be weekly, four weekly or monthly and not on a cumulative basis. Are you excluding bonuses and overtime premiums from the minimum pay calculations? We often find with shift work employees change shifts to accommodate another member of staff and this is where the hours worked in a particular pay period can lead to issues of non-compliance with the visa regulations noted above.
- Deductions from pay: It is not uncommon for deductions to be made from an employee’s pay and where these are made, whether it is from gross or net pay, for example: uniforms, meals, accommodation, they will have an impact on the pay calculation. Any deductions made by the employer, whether it is from gross or net pay must not bring the employee’s pay below the NMW limits.
- Record keeping: Employers are required to maintain detailed pay and hours worked records for all employees for at least the past six years. Is this something you are doing? Do you regularly review compliance with the NMW regulations?
- Policies and contracts: It is essential that your employment contracts clearly define working hours, how breaks are treated as well as the expectations of both you, as the employer, and your employees. Are policies in place for travel time, sleep-ins and training, changes of shifts etc.. What information is provided to staff, regardless of whether they are full, part-time or employed via a zero-hours contract.
Action points and where we can assist
HMRC are carrying out NMW reviews, which from April 2026 will become the responsibility of the new Fair Working Agency. Both organisations will be making use of AI technology to interrogate data they already hold, such as payroll RTI submissions, to identify any potential compliance failures. If HMRC should undertake an NMW review, you will need to ensure that you can provide answers to the questions/issues set out above? So what can you do now?
- Proactive risk management To avoid falling foul of immigration rules, organisations should move beyond reactive compliance and adopt a proactive, risk-based approach. We can help review your current risk management processes and help you to improve management and governance in this area.
- Risk assessments: Incorporate immigration compliance into wider risk assessments, particularly in industries with high reliance on overseas workers. We can carry out specific compliance based checks on your current data and processes to help you manage compliance.
- Scenario planning: Consider potential impacts of workers overstaying or exceeding visa conditions on operations and client service delivery. What are your contingency plans and levers that you can apply to help business continuity?
- Governance oversight: Ensure immigration compliance is regularly reported to senior leadership, with clear accountability for monitoring.
- NMW monitoring: Review your systems which monitor the actual hours worked and calibrate these against the employees hourly rates of pay. We can help carry out spot checks on your data to help ensure your continued compliance with the regulations and identify any gaps in your systems.
- Record keeping: Ensure you are reviewing employees pay and deductions as part of your monthly payroll processing.
- Policies and contracts: You need to ensure these are regularly reviewed and updated. We are able to review and provide comment on the current policies and contracts to enhance your documentation.
- Continuous improvement: Review lessons learned from any breaches or near misses, and update processes accordingly
Summary
All organisations face considerable challenges especially in terms of staff resourcing. However, it is important to ensure your compliance obligations, whether that is to the Home Office, HM Revenue & Customs or eventually the Fair Working Agency are fully maintained.
If you need assistance in reviewing any of these areas, please contact Rakesh Vaitha, Risk Assurance Director, or Nick Bustin, Director, Head of Employment Tax.
