Latest Posts
Are Your Claw-Back Clauses Compliant With UK Immigration Laws? Navigating the Latest Sponsor Licence Changes
From December 2024 and January 2025, significant changes have been introduced to the UK Sponsor Licence Guidance, and claw-back clauses in employment contracts have been in the spotlight. These changes are critical for employers sponsoring skilled workers under the UK immigration system, as non-compliance could result in severe penalties, including the suspension or revocation of your sponsor’s licence.
A claw-back clause allows employers to recoup certain costs associated with sponsorship and visa applications if an employee leaves their role prematurely. While these clauses can protect your company’s financial investment, the updated guidance introduces strict limitations to ensure fairness and compliance with UK immigration law.
Key questions to consider:
- Are your claw-back clauses clearly defined and legally enforceable?
- Are you aware of the costs you can and cannot recover from employees?
- Is your company prepared for a Home Office audit?
Employers would need to clearly define which costs can be recovered through a claw-back clause. Employers would typically include claw-back provisions for:
- Relocation expenses
- Sign-on bonuses
- Recruitment fees
- Specific training costs
- Visa and immigration costs
- Professional membership fees
Employers must ensure that these costs are reasonable and directly related to the employee’s role, and employment contracts must clearly set out the circumstances in which claw-back provisions apply, the specific costs that can be recovered, and the timeframe and method of recovery.
The newly updated guidance now explicitly prohibits employers from recouping the following costs from employees:
- Immigration Skills Charge (ISC)
- Certificate of Sponsorship (CoS) fees
- Sponsorship licence fee and ‘associated administrative costs’
These costs are considered to be the responsibility of the employer and cannot be passed on to the employee, even indirectly. The main concern revolves around associated administrative costs. According to the official guidance and the Sponsorship Management System, these costs definitely include priority service fees, which employers are not allowed to recover. In addition, following consultation with the Home Office, legal fees associated with sponsorship must also be covered by the employer.
In the case of newly established companies, even if the founder or entrepreneur initially pays for the legal and administrative costs personally, the application for a sponsorship licence and the associated fees must ultimately be paid by the company. This ensures compliance with government regulations and helps to avoid potential audit issues.
Employers need to review their existing employment contracts and sponsorship policies to ensure they comply with the updated guidance. Failure to do so could result in the suspension or revocation of their sponsorship licence. In addition, clear and transparent communication with both current and prospective skilled workers is crucial. Employers should provide detailed information on claw-back clauses and their implications, and ensure that employees fully understand their rights and obligations.
At Quastels, we specialise in corporate immigration and employment law, and offer tailored solutions to help employers navigate these changes with confidence. Our services are designed to ensure your business remains compliant while protecting your investment in global talent.
For further assistance or to arrange a compliance review, please contact our team. We are here to help you navigate these changes and ensure your sponsorship practices remain robust and compliant. Let us help you protect your business and your employees.
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Quastels Recognised in The Legal 500 UK 2025 Rankings
We are delighted to announce that Quastels has been recognised in this year’s The Legal 500 UK 2025 rankings across two categories:
- ‘Leading Firm’ in Commercial Property: Corporate Occupiers
- ‘Firm to Watch’ in Industry Focus: Retail & Consumer
About The Legal 500
The Legal 500 is one of the most prestigious legal directories, assessing and ranking law firms and lawyers based on independent research, client feedback, and industry expertise. Recognition in The Legal 500 is a testament to a firm’s high-quality legal services and strong client relationships.
At Quastels, we take great pride in our reputation for excellence and client satisfaction, and we are honoured to be acknowledged in this year’s rankings.
Key Rankings
Commercial Property: Corporate Occupiers
For the fourth consecutive year, our Commercial Property team has been ranked in the Commercial Property: Corporate Occupiers category. Additionally, we are proud to have earned a ‘Client Satisfaction’ badge, reflecting our dedication to exceptional service and expertise in this field.
The ranking highlights our extensive legal expertise, particularly in:
- Portfolio management
- Development transactions
- Pre-lets
- Joint ventures
Our practice spans the retail, leisure, and office sectors, delivering tailored advice to businesses navigating commercial property matters.
Recognised Legal Professionals
The Legal 500 ranking specifically commends our team leaders and key individuals for their contributions:
- Mark Cornelius (Partner and Co-head) – Recognised for his expertise in headquarters relocations, acquisitions, and disposals.
- Naomi Jones (Partner and Co-head) – Praised for her work in commercial real estate and conditional sale and purchase agreements.
- Aisha Anjum (Senior Associate) – Noted for her real estate finance work, regularly assisting property funds and institutional investors.
- Stephanie Houston (Senior Associate) – Recognised for her focus on the construction aspects of property-related joint ventures.
Client Testimonials
“They know their market and have solid experience. Approachable and ensures the task and advice is thorough and completed in appropriate timescale.”
“Naomi Jones – detailed, efficient, responsive, approachable and commercially minded. Highly recommended.”
“Mark Cornelius has a deep knowledge and understanding of commercial property. He is very personable and always provides legal advice which is clear, commercial and pragmatic, enabling us to close transactions without compromising on risk.”
“We have always experienced professionalism, reliability and commercial awareness with Quastels. The team provides invaluable guidance, backed by a wealth of expertise and experience. Quastels are our go-to for all legal matters, providing outstanding service every time.”
“Naomi Jones is fantastic and always gets the work done. She is available whenever we need her. She always delivers results. Her team is also fantastic.”
“Aisha Anjum is an absolute pleasure to work with – her knowledge is always relevant and concise. She works quickly and transparently, with any delays being communicated well in advance. She helped me navigate a particularly difficult lease reassignment in 2023 that tested everyone’s patience, but not Aisha’s! Absolutely unflappable, and extremely competent. Delighted to work with her and I look forward to our next transaction.”
Industry Focus: Retail & Consumer – ‘Firm to Watch’
This year, we are pleased to expand our presence in The Legal 500 rankings, being named a ‘Firm to Watch’ in the Retail & Consumer industry focus category.
Our Brands & Luxury sector offering received special recognition for its cross-disciplinary approach, providing legal expertise across Employment, Corporate & Commercial, and Real Estate.
The Legal 500 highlighted the contributions of:
A Commitment to Excellence
We are incredibly proud to be recognised in both Commercial Property: Corporate Occupiers and Retail & Consumer, reaffirming our standing as a trusted legal partner.
A heartfelt thank you to our clients, colleagues, and The Legal 500 for their continued support and kind words. This recognition motivates us to continue delivering exceptional service across all our practice areas.If you require legal assistance, please contact us – we would be delighted to help.
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Allocation of Tips Act 2023
How Will The New Employment (Allocation of Tips) Act 2023 Affect The Hospitality and Leisure Industries?
The landscape of tipping and service charges in the UK is set to undergo a significant transformation with the introduction of the Employment (Allocation of Tips) Act 2023 later this year.
This legislation aims to eliminate uncertainties surrounding the allocation of service charges and other tips, ensuring that employees receive their due share.
In this article, we delve into the current system and the forthcoming changes that businesses in the leisure and hospitality sectors should be aware of.
Current System: How Does It Work?
At present, “tipping” typically encompasses both tips (whether in cash or card) and service charges, which can be discretionary or mandatory. When customers give cash tips directly to staff, these tips essentially become the property of the employee. While their employment contract may stipulate otherwise, it is generally up to the individual to decide whether to share these tips with colleagues.
On the other hand, when tips and service charges are collected by the employer—whether through a tip jar on the counter or a 12.5% service charge added to the bill—the distribution methods can vary. These range from the employer determining the allocation of tips and service charges to the staff members themselves agreeing on the day’s distribution of cash tips.
Additionally, many businesses put in place a “tronc” system, being a mechanism which allows tips and service charges to be pooled and distributed among staff by a designated “Troncmaster” without direction from the employer. It is worth noting that the chosen method of collection and distribution carries tax and national insurance implications, which will not be covered in this article.
Currently, there are no restrictions on businesses deducting amounts from the collected tips and service charges before distributing them to staff. While there may be valid reasons for such deductions—such as the operational costs of administering a tronc scheme—media attention has increasingly focused on employers making significant deductions from service charges, particularly as around 80% of UK tipping now occurs via card payments.
Five key changes Under the Employment (Allocation of Tips) Act 2023 are as follows:
1. Prohibition of Deductions
Under the new legislation, businesses will no longer be permitted to make deductions from the tips and service charges collected. Every penny collected must be distributed to the staff, with deductions only permissible for tax or as otherwise authorised by law.
2. Obligation to Allocate Tips Fairly
Businesses will be obligated to allocate tips and service charges “fairly” among workers. Although the legislation does not specify what constitutes fair allocation, this is expected to be clarified in due course. Employers will be required to have a written policy outlining the fair, transparent, and consistent distribution of tips.
3. Time Limit for Payment
Tips and service charges must be paid to eligible workers no later than the end of the month following the month in which the tip or service charge was received from th
4. Record-Keeping Requirements
Employers must maintain records of the allocation and distribution of tips for a minimum of three years from the date they are received.
5. Right to Claim in Employment Tribunal
Employees will have a separate right to bring a claim in an employment tribunal if there is a breach of these requirements. The tribunal may, among other remedies, order compensation of up to £5,000 to an affected employee to compensate for any losses suffered.
Final comments
The implications of these changes are significant, particularly for employers in the leisure and hospitality sectors. With businesses already facing financial challenges, the additional administrative burden of distributing tips and service charges could strain resources. One alternative may be to pass these costs back onto customers, but this is unlikely to be popular in the current economic climate.
In light of the forthcoming legislation, it is prudent for businesses to start implementing the necessary policies, structures, and procedures now. By doing so, businesses can be better prepared to comply with the new requirements and ensure compliance from the outset.
To discuss any of the points raised in this article, please contact Adam Convisser or fill in the form below.
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