The race to hire international talent – risks and pitfalls

The cost of sponsoring workers under UK visa routes is higher than ever before.

An immigration white paper policy document was published by the government on 12 May 2025, containing a number of proposed changes and reforms to the UK immigration system, – including raising the skills threshold for Skilled Worker visas, which removes 111 eligible occupations, effective from 22 July 2025.

Many businesses benefit from recruiting international talent by sponsoring foreign nationals to enable them to work in the UK.

However, the increasing cost and administrative implications associated with sponsoring workers are leading businesses to question whether they need to restrict applications from foreign nationals who need to be sponsored – but in doing so, could you inadvertently discriminate against job applicants based on their race?

Protection from discrimination under the Equality Act 2010

Protection from discrimination under the Equality Act 2010 is a day one right and also applies to job applicants before they are employed.

While UK nationals have an automatic right to work in the UK, the same can’t be said for foreign applicants who don’t already have the independent right to work in the UK. On the face of it, rejecting applications based on the individual’s right to work status can easily be perceived as race discrimination.

In order to sponsor a worker in the UK – with the most common route being the Skilled Worker route – a business must apply to the Home Office for a sponsor licence. The application fees alone can be considerable and there are a number of ongoing obligations placed on businesses by the Home Office to satisfy compliance requirements, which can be onerous.

Once a business has a valid sponsor licence in place, there are also rules and eligibility requirements in relation to employees that they can sponsor, which has been affected by the raising of the skills threshold for Skilled Worker visas. This includes minimum salary requirements, which increase regularly.

All these factors may contribute to a business reaching the conclusion that sponsoring a non-UK national is not a commercially viable option and deciding to employ a candidate who already has the right to work in the UK.

Indirect race discrimination

Indirect race discrimination under the Equality Act 2010 is where a business has a practice, criterion or practice (PCP) in place that applies to everyone but has the effect of placing a particular group of people – in this case, non-UK nationals – at a particular disadvantage.

However, this type of discrimination can be ‘objectively justified’ if the treatment is a ‘proportionate means of achieving a legitimate aim’. This means that a policy to not hire non-UK nationals can be lawful if there is a valid business reason for it, and if there is no other reasonable, non-discriminatory way to achieve the same aim.

The likely aim in this context would be avoiding the commercial costs to the business of sponsoring an individual but whether this is satisfactory would have to be considered on a case-by-case basis, as a scorned job applicant is not prevented from taking the matter forward to an Employment Tribunal should they wish to.

In Osborne Clarke v Purohit, the Employment Appeal Tribunal (EAT) held that a policy of not accepting applications from non-European Economic Area nationals amounted to indirect race discrimination. While this judgment is now over 15 years old, it nonetheless remains binding on Employment Tribunals and illustrates that employers must exercise caution when dealing with their recruitment processes.

One of the factors taken into consideration by the EAT in this case was the employer’s available resources and it was found that it would have been reasonable in the circumstances for the employer to consider all applications from all eligible applicants on merit and then consider any sponsorship matters later.

The landscape in this complex area is constantly evolving but it remains the case that careful consideration should always be given to any policy implemented by an employer, and legal advice should be taken early on.

Tips for employers

• Consider all job applicants based on merit rather than expressly having a policy in place to not hire non-UK nationals
• In general, any policy implemented by an employer should be given careful consideration as inadvertent discrimination can occur for a host of reasons
• If in doubt, seek legal advice.