Employer and sponsor immigration compliance is becoming more interventionist. The Home Office has strengthened sponsor guidance, lowered the practical threshold for action and is using more data matching, remote checks and targeted information requests. For sponsors, compliance should be treated as an ongoing governance risk, not revisited haphazardly.
The key trend is a move from document-led to systems-led compliance. HR, payroll, recruitment, line management and immigration processes must work together in practice. The Home Office may identify a breach before contacting the sponsor, particularly where HMRC payroll data does not match the CoS salary, reporting is incomplete, or the role does not align with the relevant occupation code or job description.
This article covers hot topics and trends from the first half of 2026 for employers and sponsors. It starts with right to work and student working conditions, which apply to employers generally. The rest focuses on sponsor licence compliance, common system weaknesses and practical steps to reduce the risk of suspension, revocation, civil penalties or workforce disruption.
1. Right to work and student working conditions
Right to work checks remain a core employer obligation and the civil penalty regime will expand from 1 October 2026 to cover certain casual workers. Employers must conduct the correct check before employment begins, retain evidence and carry out follow-up checks where permission is time limited. The move to digital status and eVisas means employers need clear processes for online checks, share codes and recording work restrictions.
Student working conditions are a particular hot topic for employers. Employers should not assume that all students can work the same hours or that term dates are obvious. Work permission can depend on the individual’s immigration status, course level and institution, and term time limits are strict. Employers should obtain and retain evidence of term and vacation dates, monitor hours across the relevant working week and be alert to prohibited work, including self-employment and certain permanent roles.
Recent Home Office action has highlighted that student working issues are not confined to an illegal working risk. Failures to monitor student working conditions can contribute to sponsor licence suspension or revocation.
During the summer graduate recruitment window, employers should manage transitions from Student to Graduate or Skilled Worker status carefully and ensure that the right permission is in place before a worker changes their working pattern or starts a sponsored role.
2. Increased compliance checks and a lower tolerance for errors
The direction of travel is clear: sponsors should expect more checks, more questions and quicker escalation where the Home Office identifies a concern. Updated sponsor guidance emphasises that sponsors are trusted to maintain the integrity of the immigration system and that breaches do not need to be deliberate to create serious consequences. In practice, this means an innocent administrative error, if it points to weak controls or a failure to understand sponsor duties, can still lead to significant compliance action.
Compliance activity may take several forms: an on-site audit, a remote review, a salary check, a request for payroll records, a request for explanations about particular sponsored workers, or an investigation following an apparent mismatch in data. Sponsors should therefore assume that their systems may be tested at short notice and that they will need to explain not just what happened, but to also explain the improvements made to their systems to prevent future reoccurence.
A common issue is that immigration compliance often sits with HR or a central mobility team, whilst the information needed to maintain compliance is held elsewhere: payroll knows what has actually been paid; line managers know whether duties or working patterns have changed; absence systems record unpaid leave; recruitment teams hold job descriptions and role rationale; and the Level 1 user is responsible for reporting changes on the Sponsorship Management System (SMS). Where these teams do not communicate promptly and effectively, the sponsor may be exposed even if no one intended to breach the rules.
3. Reporting on changes to salary: the biggest current risk area for sponsors
Reporting on changes to salary is one of the areas most scrutinised by the Home Office. The Home Office may check whether sponsored workers are being paid at least the salary stated on the CoS. Those checks may be carried out through compliance visits, remote checks and data matching with HMRC payroll information.
A common compliance issue we often see arising is where there have been changes in salary since the CoS was assigned, for example to reflect permitted changes in working patterns, but where these have not been reported on the SMS. In many cases, the individuals who are aware of the change are not those responsible for sponsor reporting. This can lead to Home Office concerns about underpayment and may trigger a compliance audit. Even where the salary adjustment is permitted under the Immigration Rules, failures to report the change on the SMS or maintain adequate internal records can contribute to sponsor licence suspension or revocation.
Sponsors should compare CoS information against current payroll and employment records on a monthly basis and ensure that any reportable changes have been notified through the SMS in accordance with the reporting requirements.
4. Occupation codes, eligible roles and new entrant rates
The replacement of the genuine vacancy concept with the eligible role requirement has sharpened the focus on whether the sponsored role matches the duties described on the CoS. Sponsors should expect questions where a role is borderline or could fall within a lower, non-eligible occupation classification.
The occupation code must reflect the actual duties, seniority, skills and responsibilities of the role. Where the role evolves, or where the worker is asked to perform materially different duties, the sponsor should consider whether a report, new CoS or fresh application is needed.
New entrant rates also require careful monitoring as they are time limited. A common compliance error we have seen is where the CoS is issued for a longer period than the new entrant salary can be relied on.
Key tips for sponsors
Sponsors should consider the following steps:
- Carry out a sponsor compliance health check to identify gaps before they are picked up in a Home Office audit;
- Design a monthly reconciliation process to check the information on the CoS against updates / changes to a role;
- Join up HR, payroll, immigration and line management controls to ensure that an immigration review is conducted before changes are implemented and right to work processes;
- Strengthen SMS reporting controls to support regular and corrective reporting;
- Provide training and ongoing oversight to ensure that staff are prepared for compliance checks.
The compliance landscape for employers and sponsors has changed. The Home Office is increasingly able to identify discrepancies through data matching and targeted checks, and sponsors may have limited time to explain what has happened. The safest approach is to assume that any sponsored worker’s file could be reviewed at short notice and to ensure that the sponsor’s records, payroll data and reporting history tell the same story.
For employers, the practical message is straightforward: sponsor compliance is no longer a standalone immigration task. It is a cross-functional governance issue that depends on joined up systems, trained managers, accurate payroll and timely reporting. Sponsors that invest in those controls now will be better placed to respond to compliance checks, protect their licence and maintain business continuity.
If you would like to discuss anything outlined in this article, please get in touch.
The material in this article is provided for guidance and general information only and is not intended to constitute legal or other professional advice upon which you should rely. In particular, the information should not be used as a substitute for a full and proper consultation with a suitably qualified professional. Please do contact the Bates Wells team if you require further advice.