Rising Compliance Risk: What the New Visa Rules Mean for Hospitality
By Sunny Sandhu, Senior Immigration Associate, A Y & J Solicitors (www.ayjsolicitors.com)
World Cup screenings, warm-weather weekends and peak holiday demand have brought a welcome increase in trade for pubs, restaurants and hotels. Venues are extending opening hours, adding extra shifts and adjusting rotas to cope with demand.
For most operators, the immediate priority is simple: keep the tills ringing while the trade is there to be taken.
However, the same staffing and payroll changes that help a hospitality business manage a busy summer can also expose gaps between what sponsored workers are being paid and what the business told the Home Office it would pay them.
Since 8 April 2026, those gaps have become more difficult to overlook.
Why payroll compliance has changed
The Skilled Worker salary rules changed on 8 April 2026. Under the updated requirements, the salary paid to a sponsored worker in each pay period must meet the applicable going rate for every hour worked during that period.
The Home Office can also compare the salary recorded on a worker’s Certificate of Sponsorship with payroll information held by HM Revenue and Customs. These checks may take place without an employee making a complaint and without the business first receiving a physical compliance visit.
This does not mean that one unusual payslip will automatically result in a sponsor licence being revoked. The rules allow salaries to be assessed over short rolling periods. For workers paid monthly, for example, the amount paid over any three-month period must equal at least one quarter of the required annual salary.
However, operators can no longer assume that meeting an annual salary figure will be sufficient if the worker’s hourly rate, hours worked or pay during individual periods does not meet the relevant requirements.
That distinction matters in hospitality.
A sponsored employee may be contracted for one working pattern but work substantially longer hours during a busy month. A salaried manager may cover additional late shifts. Payroll may record those hours incorrectly or fail to distinguish between guaranteed salary and variable payments.
The business may still believe that the worker earns the correct annual salary. The Home Office may see a pay period in which the salary does not match the hours worked or the information recorded on the Certificate of Sponsorship.
Why hospitality businesses are particularly exposed
Hospitality businesses rarely operate with perfectly consistent working patterns. Demand changes with the weather, sporting events, school holidays, conferences and local events.
During a busy period, operators may:
• extend opening hours;
• add overtime to existing rotas;
• move managers between locations;
• change an employee’s responsibilities;
• use agency or casual workers at short notice; or
• rely more heavily on tips, bonuses, service charges and shift payments.
Each decision may make commercial sense. However, some changes can affect sponsor compliance if they are not properly recorded, reported or reflected in payroll.
Overtime and variable payments require particular attention. Sponsored salary calculations generally rely on guaranteed basic gross pay and certain guaranteed payments treated in the same way as basic pay. Overtime, bonuses, shift allowances and payments that depend on fluctuating hours will not normally correct a shortfall in the required sponsored salary.
Recent compliance reviews carried out by A Y & J Solicitors, an SRA-regulated and Legal 500-ranked UK immigration law firm advising businesses on sponsor licences and Skilled Worker compliance, suggest that problems often arise not because an employer has deliberately underpaid a worker, but because payroll practices, working hours and sponsorship records have gradually stopped matching.
Yash Dubal, Director of A Y & J Solicitors, said: “The greatest risk for hospitality operators is often the gap between what was originally recorded and what is happening in practice. A worker’s hours, duties or pay arrangements may change gradually during busy periods, but the sponsorship record remains the same. By the time the difference is identified, the business may already be responding to Home Office scrutiny.”
Enforcement is no longer limited to a site visit
Sponsor compliance was once commonly associated with a Home Office officer arriving at the premises and asking to inspect personnel files.
Site visits remain possible, but they are no longer the only way in which a problem can be identified.
The Home Office can use HMRC payroll information to check whether a sponsored worker is receiving the salary recorded on their Certificate of Sponsorship. A discrepancy may therefore come to light without the business receiving advance warning or a visit.
Enforcement has also intensified. Home Office figures show that 3,100 Skilled Worker sponsor licences were revoked during 2025, the highest annual total recorded. A further 1,545 were revoked during the first three months of 2026.
A sponsor licence can be suspended or revoked for several reasons, including:
• underpaying sponsored workers;
• failing to report relevant employment changes;
• maintaining incomplete personnel records;
• employing someone without the correct permission; or
• sponsoring a role that is not genuine.
Illegal working creates a separate risk. Employers can face civil penalties of up to £60,000 for each illegal worker.
Why existing sponsored workers are becoming harder to replace
The recruitment options available to hospitality businesses have narrowed substantially.
Home Office statistics show that Skilled Worker visa grants to main applicants in food preparation and hospitality trades fell by 82% to 939 in the year ending March 2026. The number had previously reached 11,542 in the year ending June 2024.
Since 22 July 2025, a role must normally be skilled to graduate level to qualify for the Skilled Worker route, unless the occupation appears on an approved shortage list or a transitional provision applies.
Many hospitality occupations, including chefs and catering and bar managers, are classified below graduate level. Existing workers sponsored before 22 July 2025 may be able to continue under transitional provisions, provided they have maintained continuous Skilled Worker permission and satisfy the remaining requirements.
For an operator, this means that losing a sponsor licence has consequences beyond the financial cost of responding to an investigation.
Sponsored employees may have their immigration permission shortened and may eventually have to stop working for the business. At the same time, the employer may no longer be able to recruit overseas replacements for the same roles.
The sponsored employees already working within a hospitality business may therefore be considerably more difficult to replace than when they were originally recruited.
Five checks operators should complete this summer
1. Compare payroll against every Certificate of Sponsorship
Review each sponsored worker’s gross basic pay, contracted hours, actual hours and pay frequency.
For monthly paid workers, examine every rolling three-month period rather than relying only on the annual total. Check that the worker meets both the applicable annual salary requirement and the required going rate for the hours worked.
Do not assume that the salary written into the employment contract proves compliance if the payslips and working records show something different.
2. Separate guaranteed salary from variable payments
Check how overtime, bonuses, service charges, shift allowances and other additions are recorded on the payslip.
A worker’s total earnings may appear sufficient while their qualifying sponsored salary remains too low. Payroll teams should understand which payments count towards the immigration salary requirement and which do not.
3. Review changes to hours, duties and locations
Busy periods often result in managers working at another branch, taking on different responsibilities or covering a substantially different working pattern.
Some changes can be accommodated within the existing sponsorship. Others must be reported or may require a new Certificate of Sponsorship and visa application.
Salary reductions, changes to a worker’s normal work location and other specified changes generally need to be reported through the Sponsor Management System within ten working days.
4. Check right to work records and agency arrangements
Operators must retain compliant right to work evidence for the people they employ and sponsor.
Where agency workers are used, the employing agency will normally be responsible for conducting the statutory right to work check. However, hospitality businesses should not simply assume that the correct process has been followed.
Contracts should clearly allocate responsibility, and the operator should obtain appropriate written confirmation from the supplying agency.
5. Investigate gaps before the Home Office does
If payroll records, working hours, job descriptions or Sponsor Management System reports do not match, identify the reason before making retrospective changes.
Some issues can be corrected or explained. Others may require a formal report, a change of employment application or a wider compliance review.
The experience of A Y & J Solicitors in reviewing sponsor records indicates that early intervention is usually less disruptive than responding after a suspension notice has been issued. Once the Home Office has raised concerns, the business may have limited time to explain the discrepancy and provide supporting evidence.
A busy season should not become a compliance problem
The World Cup and summer trading period offer hospitality businesses a valuable commercial opportunity. Operators should make the most of it.
But revenue, rotas, payroll and sponsor compliance can no longer be treated as separate areas of the business. The staffing decisions made during the busiest weeks of the year may be the same decisions the Home Office later examines through HMRC payroll data.
The businesses that finish the summer with both strong trading results and an intact sponsor licence will be those that recognise this connection early.
For operators employing sponsored workers, the question is no longer simply whether the annual salary appears correct. It is whether every payslip, hour worked, employment change and Sponsor Management System report tells the same story.
>>>>>>>>>
This article is a general guide and does not constitute legal advice. Immigration rules and Home Office guidance may change. Advice should be obtained based on the specific circumstances of the business and its workers.