Navigating the complexities of verifying a potential employee’s right to work in the UK can be a daunting task. There are numerous steps that employers will be expected to take to comply with Home Office regulations in this area; if these checks are not carried out correctly, in line with the Code of Practice on Preventing Illegal Working issued in 2022, the repercussions for the company could be substantial.
As such, it is vital for every business operating in the UK to be aware of the penalties that apply when employing illegal workers, and the steps they should take to avoid falling foul of these regulations.
What are the civil penalties?
If an employer is discovered to be violating business immigration laws by employing individuals without the proper right to work in the UK, it could face a civil penalty of up to £20,000 for each illegal worker, which can result in severe financial damage to the business. However, this penalty could be lessened if it is a first-time offence, or if the business can show mitigating factors, such as having an effective system for right to work checks, proactively reporting illegal working to the Home Office, and cooperating with the Home Office investigation.
In addition to the civil penalty, if a business holds a sponsor licence to employ migrant workers, the Home Office may impose ‘special measures’, or even decide to suspend or revoke the licence. This could cause significant difficulties for both the organisation and the sponsored migrant workers.
If a business operates across multiple sites and each site handles its own recruitment, the business would only be considered a repeat offender if the Home Office investigators determine that illegal working is due to a systemic failure in the company’s recruitment practices. If a business acquires a new company, and employees are transferred under TUPE, there is a 60-day grace period to ensure all employees are legally employed.
If a business receives a notice of a potential civil penalty, it is crucial to seek legal advice, whether to mitigate the penalty or challenge its validity. A business may object to a civil penalty if they can prove they are not liable, they hold a statutory excuse, or if the penalty is too high for the business to reasonably afford. A well-supported notice of objection could save a business thousands of pounds. If the Home Office rejects the objection, the business has the right to appeal to the County Court.
Could my business face criminal sanctions?
In addition to civil penalties, a business could face criminal sanctions if found to employ a disqualified person. However, criminal sanctions are less common, with only one prosecution recorded between July 2019 and September 2021. To establish guilt beyond reasonable doubt, the Crown Prosecution Service must demonstrate that the employer knowingly or had reasonable cause to believe that an individual was working illegally.
A conviction could result in an unlimited fine, a confiscation order, and up to five years in prison if the case is handled in the Crown Court in England and Wales. If the case remains in the Magistrates’ Court, the business could face a fine of £5,000 and up to six months imprisonment. The sanctions are similar in Scotland.
Any person who holds a position of responsibility in a corporate body, partnership or as a sole trader – including a director, manager or company secretary – can potentially face criminal proceedings in these cases.
Who will be held liable?
Typically, the employer who directly hires a worker under a contract – whether written, oral or implied – is responsible for ensuring there is no illegal working. However, when a business engages self-employed individuals under a contract for services, this creates a question of whether the organisation will still be held liable if it fails to conduct the relevant checks of the individuals concerned.
In our opinion, the answer is yes. This is because the immigration rules broadly define “employment” to include paid and unpaid employment, work placements as part of a course or period of study, self-employment, and engaging in business or any professional activity.
For employers using external contractors supplied by another organisation such as an agency, there is no legal liability. However, it is considered best practice to confirm that your contractors conduct compliant right to work checks. In this instance, the responsibility lies with the agency or organisation supplying the labour.
How to ensure your workers have a right to work in the UK
For employers using external contractors supplied by another organisation such as an agency, there is no legal liability. However, it is considered best practice to confirm that your contractors conduct regular right-to-work checks, in line with regulations. In this instance, the responsibility lies with the agency or organisation supplying the labour.
A business can also use an external Identification Document Service Provider (IDSP) that uses Identification Document Validation Technology (IDVT) to verify the rights of British and Irish citizens. In this case, a positive check from the IDSP provides the employer with a statutory excuse under the civil penalty scheme, allowing for a limited sharing of responsibility.
In conclusion, this is a complex area where careful planning, robust procedures, and taking responsibilities seriously can yield significant benefits. It’s all too common for businesses to treat immigration checks as an afterthought – an approach that can prove costly.