Sponsorship Cost Recovery Clause Review
Do your employment contracts, offer letters or repayment agreements require sponsored
workers to repay immigration or sponsorship costs?
If so, your business may need urgent legal review. Home Office sponsor guidance now restricts the recovery of certain sponsorship-related
costs from sponsored workers. The guidance states that sponsors are responsible for paying the CoS fee and must not recoup or attempt to recoup any part of the CoS fee or associated administrative costs from a sponsored worker in specified circumstances.
NA Law Solicitors reviews sponsorship repayment clauses, clawback agreements and immigration cost recovery arrangements for UK employers.
Call 020 3524 5439 or email admin@nalawsolicitors.co.uk to request a fixed-fee review.
Old repayment clauses can now create sponsor licence risk
Many employers historically used repayment clauses to recover immigration costs if a sponsored worker left within a certain period. That approach now needs careful review. The Home Office guidance says sponsors must not recoup or attempt to recoup certain sponsorship fees from sponsored workers, including specified Certificate of Sponsorship fees and associated administrative costs in the circumstances set out in the guidance. The updated sponsor guidance states the Home Office will normally revoke a sponsor licence if a sponsor recoups or attempts to recoup prohibited sponsor licence fees, CoS fees or Immigration Skills Charge from a sponsored worker. This means a clause that looks like a simple employment repayment term may carry immigration compliance consequences.
This review is for employers who:
- Sponsor Skilled Worker employees.
- Have repayment clauses in contracts or offer letters.
- Ask sponsored workers to repay immigration costs if they resign.
- Recover or deduct CoS fees, sponsor licence costs, legal fees, priority fees or admin fees.
- Use clawback agreements for visa or sponsorship costs.
- Have template contracts drafted before the latest sponsor guidance changes.
- Want to know which costs can lawfully be recovered and which should not be recovered.
- Need to align employment contracts with sponsor licence duties.
- Want to reduce the risk of complaints, disputes or Home Office compliance action.
This is an immigration, employment and compliance issue
Sponsorship cost recovery is not only a contract issue.
It can involve:
- Sponsor licence compliance.
- Employment contract enforceability.
- Unlawful deduction risk.
- Worker complaints.
- Home Office scrutiny.
- Reputational risk.
- Potential licence suspension or revocation risk.
This is exactly the type of issue that can sit unnoticed in old employment templates until a worker complains, a dispute arises, or the Home Office reviews the sponsor.
What is included in the Sponsorship Cost Recovery Clause Review
Depending on the package agreed, we can review:
- Employment contracts.
- Offer letters.
- Repayment agreements.
- Sponsorship cost recovery clauses.
- Worker loan agreements.
- Deduction authorisation wording.
- Policies dealing with visa fees, CoS fees, legal fees, priority fees and sponsor licence costs.
- Existing arrangements where deductions have already been made or requested.
Whether wording should be amended for future sponsored workers. We then provide a practical risk note and recommended drafting amendments.
Fixed-fee clause review
We offer a fixed-fee review for employers who want to know whether their sponsorship cost
recovery wording creates risk.
Suggested offer structure:
- Review of one contract, offer letter or repayment agreement template.
- Identification of high-risk wording.
- Written risk summary.
- Suggested amendments.
- Call with a solicitor to discuss implementation.
Suggested price anchor: From £495 plus VAT for an initial template review. More complex cases, multiple templates or existing worker disputes can be quoted separately.
Examples of clauses that may need review
You should take advice if your documents say things like:
“The employee must repay all immigration costs if they leave within two years.”
“The company may deduct sponsorship costs from final salary.”
“The employee must reimburse the Certificate of Sponsorship fee.”
“The worker is responsible for legal fees relating to sponsorship.”
“Visa and sponsorship fees will be treated as a loan.”
“The employer may recover all costs connected with sponsorship.”
These examples may or may not be lawful depending on the exact wording, the cost being recovered, the date, the visa route and the surrounding facts. Do not rely on old templates without reviewing them.
One review covering immigration and employment risk
NA Law Solicitors can review the issue from both an immigration compliance and employment
law perspective. That matters because the wrong clause can create more than one problem.It may expose the
employer to worker disputes and sponsor licence compliance risk at the same time. Our advice is practical, direct and designed for employers who need to know what to change now. NA Law Solicitors is authorised and regulated by the Solicitors Regulation Authority. SRA No. 645049.
Check your sponsorship repayment clauses before they are challenged
If your business sponsors workers and uses repayment clauses, now is the time to review
them.
Contact NA Law Solicitors for a fixed-fee Sponsorship Cost Recovery Clause Review.
Telephone: 020 3524 5439
Email: admin@nalawsolicitors.co.uk
FAQ: Sponsorship Cost Recovery Clause Review
It depends on the type of cost, the visa route, the date, the wording used and the facts. Some
costs are restricted under sponsor guidance and should be reviewed before any recovery is
attempted.
This depends on the arrangement and the documents.Employers should take advice before
making deductions or enforcing repayment wording.
Older clauses may still create risk if they continue to operate or are enforced after the
relevant changes.That is why existing templates and live agreements should be reviewed.
No. It may also raise employment law issues, including deduction from wages, enforceability
and worker relations.
You receive a written risk summary and practical recommendations. Where appropriate, we
can suggest replacement wording or further advice on implementation.
Legal notice
This page provides general information only and does not constitute legal advice. Sponsor guidance and employment law obligations change. You should seek legal advice before making deductions, enforcing repayment clauses or changing contract wording.