Subtle sponsor guidance change with major implications for Scotland’s health and care providers

For the health and care sectors, a modest wording change in sponsor guidance (valid from 8 April 2026) may have significant implications for how providers manage bank staff, agency cover, contractors and other “direct engagements”.

At a glance

• The Home Office now expressly refers to workers a sponsor may “employ or directly engage”.
• “Directly engage” is undefined, which leaves sponsors to interpret how far this extends beyond traditional employment.
• Contracting and procurement practices may need to be reviewed so the right teams trigger right to work checks at the right time.
• A documented approach to borderline cases can help reduce compliance risk and demonstrate consistency if audited.

Sponsor compliance updates are often incremental. This change is easily missed, until you consider how frequently health and care providers engage individuals who are not on payroll. The revised wording therefore raises a practical question: where does employment end and “direct engagement” begin?

The update in context

Sponsor licence holders must comply with right to work checking obligations and broader sponsor duties. The updated Home Office sponsor guidance (valid from 8 April 2026) states that sponsors must check that any worker they wish to sponsor – and any worker they otherwise wish to employ or directly engage – has the appropriate permission to work in the UK before work begins.

What the guidance says (excerpt)

You must check that any worker you wish to sponsor (including a worker who is not your direct employee), or any worker you otherwise wish to employ or directly engage, has permission to enter or stay in the UK and can do the work in question before they start working for you. This applies even if the worker is, or appears to be, a British citizen or other settled worker. If you fail to carry out a right to work check, or any necessary follow-up checks, you will be in breach of your sponsor duties and may be liable for a civil penalty under illegal working legislation. If you are issued with a civil penalty, or otherwise fail to carry out the correct checks, we will normally revoke your licence.

What does “directly engage” mean?

The key development is the express reference to workers a sponsor may “directly engage”, in addition to sponsored workers and employees. The guidance does not define the term. Sponsors are therefore required to assess, on a fact-specific basis, how far this expectation extends across different engagement models.

Why it matters in day-to-day operations

The revised wording is likely to increase scrutiny of non-standard working arrangements. Depending on the facts, the Home Office may expect sponsors to treat certain contractors, freelancers, sole traders, zero-hours arrangements, and ad hoc service providers as falling within “direct engagement”. In the health and care sectors, where rota gaps and short-notice cover are common, this may present immediate operational challenges. Examples of questions providers are considering include:

• Agency shifts vs. internal bank shifts: where an individual is supplied and paid by an agency under an agency contract, the agency may be the engager. Where a provider operates an internal bank and books individuals directly for shifts, the position may require closer analysis.
• On-site contractors and repeat call-outs: many providers rely on contractors for maintenance, IT support or refurbishment works across multiple homes. Where individuals are engaged directly (rather than through a company that deploys its own staff), the engagement model may need to be reviewed.
• Outsourced services (cleaning, catering, transport): where services are delivered under a contract with a supplier that assigns and supervises its own staff, this is typically further from direct engagement. Where individuals are booked personally for shifts, the analysis may be less straightforward.

The issue is not a lack of willingness to comply; rather, sponsors need requirements that are operationally workable and capable of being evidenced. With enforcement activity already significant, many organisations will adopt a cautious approach. However, in the absence of clear boundaries, a risk-averse position may become disproportionately burdensome.

What sponsors should do now

• Identify relevant engagement models: document roles engaged outside standard employment (for example, bank staff, agency cover, contractors and casual workers) and the basis of engagement across services (individual vs. corporate entity; single-site vs. multi-site).
• Set and apply a decision framework: define when an engagement will be treated as with an individual (typically higher right-to-work risk) versus with a business, and record the rationale for the approach.
• Update processes and training: ensure HR teams, home managers and rota coordinators understand when right to work checks may be required for directly engaged individuals, and embed steps into rapid onboarding and shift-booking workflows (including movement between sites).
• Review agency and supplier arrangements: confirm contractual terms and day-to-day processes (including which checks are completed, when they are completed, and how evidence is retained), and ensure responsibilities are clearly allocated and followed.
• Maintain an audit trail: keep a short, written record for borderline cases to demonstrate consistent decision-making in the event of a Home Office audit.
• Seek advice where appropriate: where status is unclear (for example, sole traders or mixed arrangements), consider obtaining immigration advice rather than taking an inconsistent approach.

Obtain professional advice

The policy intent is clear: reduce illegal working risk. However, the current drafting may encourage a broad interpretation of who must be checked, at a time when many health and care providers rely on non-payroll engagement. Until the Home Office provides clearer examples of what constitutes direct engagement, sponsors may wish to adopt a documented policy, apply it consistently, and retain evidence of the steps taken and the basis for decisions.

We can assist with reviews of engagement models, updates to right to work and sponsor compliance processes, as well as audits.

This client alert is provided for general information only and does not constitute legal advice. Specific advice should be taken in relation to particular circumstances.

Carolyn Bowie, Partner, Head of BTO’s Immigration Practice