Using an Employer of Record to act as your UK visa sponsor

A UK Employer of Record (EOR) cannot lawfully use its UK sponsor licence to simply hire out foreign nationals to work for US technology company clients if, in substance, those individuals are working for the US client rather than in a genuine role within the UK EOR’s own business. Doing so normally breaches UK sponsor licence rules and can lead to licence refusal, suspension, or revocation.

Below is the legal position, where the line is drawn, and the narrow circumstances where an arrangement can be compliant.

The UK Home Office (legal) position

UK sponsor licences exist to allow a UK organisation to fill genuine vacancies in its own business, not to supply labour to third parties.

The Home Office is explicit that a sponsor must not:

• sponsor a worker with the intention of supplying them to another organisation, or
• assign a Certificate of Sponsorship (CoS) where the sponsor does not have genuine control over the worker’s duties, outputs, and role
• this is set out in the official Sponsor Guidance (Part 3) and reinforced in current Home Office enforcement practice (gov.uk).

What this means for an EOR is that it is not lawful for a UK EOR to sponsor a Skilled Worker or employ them on paper while in reality place them under the direction, supervision, and operational control of a US technology company client if the worker is:

• doing day to day work defined by the US client
• integrated into the US client’s product teams
• accountable to US client managers.

If the above is the case the Home Office will treat this as labour supply, which is prohibited for sponsorship purposes.

Where it may be permitted

There are limited, lawful circumstances where an EOR like arrangement can work but the substance matters more than the contract labels.

The arrangement may be compliant if all the following are true:

• the worker has a genuine role in the EOR’s own business
• the job must be real, ongoing, and needed by the EOR itself, not created purely to service a client
• the EOR retains full control
• the EOR must control:
  • job description
  • duties and outputs
  • salary decisions
  • performance management
  • right to discipline and dismiss
  • client work is framed as a service, not labour supply.

Any work for the US company must be:

• part of a defined project or service delivered by the EOR
• time bound or outcome based
• clearly secondary to the worker’s main role with the EOR.

The ‘genuine vacancy’ test is met if The Home Office is satisfied that the role:

• exists independently of the individual
• fits the EOR’s business model and scale
• was not created primarily to facilitate a visa.

In practice, many EOR setups with US tech companies fail these tests because:

• US client has interviewed and chosen the employees
• US clients direct the employee’s day to day activities
• performance feedback comes from US managers
• the EOR functions as an administrative shell.

These facts make it very difficult to evidence sponsor control during a Home Office audit, regardless of what the contracts say.

What can happen if you fail the tests

If the Home Office concludes the EOR is supplying sponsored labour the following can happen:

• sponsor licence can be refused, suspended, or revoked
• existing sponsored workers’ visas can be curtailed
• future sponsorship can be barred for years
• potential for reputational and commercial damage.

These outcomes are explicitly contemplated in Sponsor Guidance enforcement sections (gov.uk).

Recommended action

If the employee is effectively working for a US tech company, the US company should:

• establish a UK entity and hold its own sponsor licence, or
• use a UK EOR service provider only where the role is genuinely embedded in the provider’s own business.

If you would like to discuss further, please do not hesitate to get in touch with your usual Crowe contact.