Immigration compliance - the hidden risk for HR

With enforcement activity rising sharply - and HR teams often at the forefront of managing sponsored workers - understanding HR’s role in company immigration compliance has never been more important; Kasia Kingsmill, Partner, Brecher LLP talks to HR Grapevine about the issues.

What does the Sponsorship Management System entail?

If you are an HR professional, it is likely that at some point in your career you will be asked to take on one of the key roles linked to a sponsor licence. More than 122,000 businesses in the UK currently hold a licence, which enables them to sponsor workers - for example skilled workers, health and social care staff, and others who would otherwise not have permission to work or remain in the UK. With that licence comes responsibility for managing the Sponsorship Management System (SMS).”

The SMS is the Home Office’s online portal used to record and report key information about sponsored workers and the organisation itself. It is the primary mechanism by which compliance is monitored.

Does accuracy matter?

An out-of-date SMS is among the most common issues uncovered during Home Office visits. Frequent failings include:

• Missing updates to worker details such as job title, salary, or work location.
• Failing to update company information after restructures, mergers, or address changes.
• Allowing too many Level 1 and Level 2 users without proper oversight.

Whilst a single error is unlikely to trigger action, a pattern of weak systems and poor controls can damage the licence, even if no illegal working has occurred.

The importance of accurate SMS management has never been greater. In early 2025, civil penalties for illegal working averaged more than £50,000 per case, with quarterly fines exceeding £40 million. Licence revocations are also at record levels.

This reflects the government’s public commitment to reduce migration and hold employers accountable for falling short of compliance obligations. In this environment, even minor lapses in SMS management may be viewed as evidence of wider non-compliance.

How essential is HR engagement?

In most organisations, HR carries the responsibility for managing the SMS. Too often the responsibilities attached to these roles are not fully explained, and too often HR sees the SMS as something for immigration advisers to manage. Both scenarios are risky. The Home Office’s guidance is clear: compliance obligations cannot be delegated.