UK sponsor employers may seek repayment of sponsorship visa costs through clawback clauses
A clawback clause is a clause under a contract of employment that permits the employer to recover (seek repayment) of money from the employee in defined circumstances. The costs of UK sponsored visas can be high and it is increasingly common for employers to include clawback clauses in employment contracts.
What UK work visa fees are recoverable – not clawback clauses related
In some cases, for example when work visa is shortened, employer can recover some of the costs. The fees that can be recovered in such circumstances is the Immigration Skills Charge (ISC). However, ISC for the first year of employment cannot be recovered.
In certain circumstances the NHS surcharge can also be recovered. This can happen when the visa application was refused or was granted for a shorter duration than anticipated at the time of application.
There are also other situations when application fees may be refunded by the Home Office. We describe those here.
Clawback repayment clauses are employment law matter
For clarity, clawback clauses in employment contract are an employment law matter. For this reason, you should seek expert employment law advice, to establish validity and enforceability of such clauses.
Our article is written from the immigration law perspective only and does not purport to provide any employment law advice. However, for reference, further below we refer to an Employment Tribunal case to illustrate how Tribunal approached a case when a clawback clause to recover immigration costs was challenged by a migrant worker employee.
Immigration UK work visa costs
There are a number of different cost categories that have to be paid when applying for UK sponsored work visa. We list them below for reference and explain them in more detail on in our other article here.
- Government/Home Office application fees – to be paid for sponsor licence, Certificate of Sponsorship (COS) and visa application.
- NHS fees (NHS Surcharge) – mandatory upfront fee for use of NHS services.
- Immigration Skills Charge – Home Office fee that sponsor employer has to pay in most cases when each Certificate of Sponsorship (COS) is assigned to migrant worker.
- Other Home Office and third party fees – cost of Home Office expedited processing, English language tests/other English language evidence, TB tests, criminal record certificate(s), costs charged by the Home Office outsourced service providers such as VFS Global and TLS for biometric appointments etc.
- Legal professional fees if immigration lawyer/adviser assists with the immigration applications.
Overall, 5-year visa for a migrant worker sponsored by large organization sums up to approximately £11,000. When there are dependant family member(s), wife and/or children, joining the main applicant, there are extra fees to pay for their applications. Application fees for each dependant family member over 18 years of age are approximately £5,000 for a 5-year visa. For most visa applicants those costs will be too high to meet themselves and they would want to rely on their sponsor employer to pay them.
Importance of HR policies and contract of employment for clawback clauses
Sponsor employers should have HR policies in place setting out what costs are covered by employer for sponsored migrant visas and whether employer will also cover the costs of family members joining the main applicant in the UK. Each individual employer may have a different policy. Some employers may pay for the migrant worker costs only but not for the dependant family members. There may also be clawback (repayment) clauses put in migrant workers contracts of employment.
It is important that employers put in place the HR policies and contracts to then rely on them if needed.
What costs must not be recovered from migrant workers
The immigration rules specifically state that Immigration Skills Charge costs must not be passed to migrant workers. The Home Office states in their Sponsor Guidance for employers that if ISC cost is found to be passed to migrant worker(s) they can revoke employer’s sponsor licence. Revocation of the licence means that the licence is cancelled by Home Office and any sponsored workers’ visas are curtailed (cancelled).
Can clawback (repayment) clauses be enforced lawfully
In relation to employer’s entitlement to recovery of immigration costs via clawback clauses, specific advice should be sought by employee migrant workers from an expert employment lawyer.
As an example, Employment Tribunal judgement Ms A Khorenzhaia v All Saints Retail Ltd: 3201455/2019, addresses some of the questions on clawback clauses.
Main lesson from the above case is that employers must give written notice to the employees about the clawbacks they plan to impose on them. The clauses have to be in a written agreement format and need to be signed by the employee. Clawback clauses are usually included in the employment contracts.
The requirement that the terms of clawback clauses and the consent to those terms must be in a written form, was established in the court case Potter v Hunt Contracts Limited 1992 IRLR 108.
There must be a document which clearly states that the deduction is to be made from the employees’ wages. It must also make clear that the employee agrees to the deduction being made from that source.Potter v Hunt Contracts Limited 1992 IRLR 108
Home Office Help Desk in its correspondence with a migrant worker (Claimant in the Employment Tribunal case) replied that they do not interfere in disputes relating to clawback clauses and treat them as an employment law matter. This confirms that their focus is on the Immigration Skills Charge and not on other immigration costs recovery.
Another take away from the above case is that the contract/agreement should be specific about what will be deducted and what will trigger payments.
According to the above cited Employment Tribunal judgement, it is not necessary for the employer to include breakdown of the costs included in the clawback clause, unless the employee enquires.