What salary mistake puts a care provider’s sponsor licence at risk?

Paying a sponsored worker less than the salary recorded on their Certificate of Sponsorship is a clear sponsor risk. The Home Office can compare the CoS with payroll and HMRC information. A reduced payment may also need to be reported within 10 working days, depending on the reason and the applicable sponsor guidance.

What does the salary have to match?

Start with the salary stated on the worker's Certificate of Sponsorship and any later change of circumstances notification. Skilled Worker sponsor guidance, paragraph SK7.19 says the Home Office will regularly check that the worker is being paid at least that amount. It says those checks may be made through compliance checks, HMRC checks, or both.

The comparison is not limited to an annual total. Paragraph SK7.20 says the required salary must be paid in pay periods of at least monthly frequency, unless the contract specifies another frequency. Paragraph SK7.21 requires the pay in each period to meet the going rate for every hour worked in that period. Paragraphs SK7.22 to SK7.24 then set additional tests for monthly pay, more frequent pay and irregular working patterns.

For a care provider, that means the audit cannot stop at the annual salary field in payroll. The practical comparison is:

1. what the CoS and any reported change say;
2. what the contract says about hours and pay;
3. what the rota or timesheet shows was worked;
4. what the payslip records as gross pay and deductions; and
5. what reached the worker's bank account.

Why can one payroll problem create a reporting problem as well?

Sponsor Guidance Part 3, paragraph C1.13 requires changes affecting a sponsored worker to be reported within the stated time limits. Paragraph C1.15 includes a reduction in salary or pay from the level stated on the CoS and normally requires the report no later than 10 working days after the change or event.

This means a lower payment can raise two separate questions. First, was the worker paid in accordance with the Skilled Worker salary rules and the sponsored employment? Second, if the salary or pay changed, was the change permitted and reported when required?

Do not assume that a later correction answers both questions. Arrears may correct the amount owed to the worker, but the sponsor must still establish why the shortfall happened, whether a report was required, whether the records were accurate at the time, and whether the same failure affected anyone else.

Can pay ever be reduced lawfully?

Some reductions are permitted, but the reason and the conditions matter. Skilled Worker guidance, paragraphs SK8.1 to SK8.4 deal with absence without pay, reduced pay and specified permitted salary reductions. The rules are not a general permission to reduce hours or pay whenever work is quiet.

Before treating a shortfall as acceptable, record the reason, dates, evidence, duration and reporting decision. If the explanation relies on sickness, parental leave, unpaid absence or another exception, check the exact provision that applies to that worker rather than relying on a general payroll label.

What evidence should a care provider keep?

Appendix D, sections 3(a) to 3(c) require copies of payslips, evidence of salary payments into the named worker's account, and a contract or written particulars showing the job, hours and pay.

These documents should agree. A complete file is not enough if the figures contradict one another. If the CoS says one salary, the contract another, the payslip records a lower amount and the bank evidence shows something else again, the documents have preserved the discrepancy rather than resolved it.

What should we do when we find a shortfall?

Work in this order:

1. preserve the original CoS, contract, payslip, payment evidence, rota and timesheet;
2. calculate the shortfall for the relevant pay period and every affected period;
3. identify the cause, including unpaid hours, deductions, absence, rota allocation or payroll input;
4. check paragraphs SK7.19 to SK7.25 and SK8.1 to SK8.4 against the worker's actual circumstances;
5. decide whether an SMS report was required under C1.13 and C1.15, and record that decision;
6. correct pay and records where appropriate; and
7. check the rest of the sponsored workforce for the same system failure.

If the licence is already under review, do not rewrite records to make them align. Keep the original evidence, the correction, the reason for it and a clear chronology.

This article provides general information and is not legal advice. Check the current guidance and the facts of the individual case before acting.

Related questions

Does one low payslip automatically mean our sponsor licence will be revoked?

No. The cause, amount, duration, applicable salary rules and action taken all matter. However, it requires immediate investigation because Part 3, C1.12 allows sanctions where the Home Office reasonably suspects sponsor duties are not being met.

Do we have to report every salary reduction?

Check the exact circumstances. Part 3, C1.15 includes salary or pay reduced from the CoS level, while Skilled Worker paragraphs SK8.1 to SK8.4 explain specified absences and permitted reductions.

Can overtime later in the year cancel an earlier shortfall?

Do not assume it can. SK7.20 to SK7.24 apply pay-period and rolling-period tests. Review the actual pay frequency and working pattern against the correct test.

What records should we compare first?

Compare the CoS, any reported change, contract, hours worked, payslip and payment evidence. Appendix D section 3 identifies the core salary and contract records.