Civil penalties triple for employing illegal workers

The civil penalties an employer may face for employing an illegal worker has tripled. From 13 February 2024 the maximum civil penalty for employing an illegal worker rose from £15,000 to £45,000 per worker for a first offence and from £20,000 to £60,000 per worker for repeat violations. It means there is now a significantly higher financial risk to employers of failing to carry out compliant right to work checks. We’ll speak to an immigration specialist why so many employers are getting this wrong.

Compliance is a strict requirement set by the Home Office as a condition of holding a Sponsor Licence allowing them to sponsor migrants to work for them in the UK. In addition, employers are also required to carry out right to work checks for prospective employees so that an appropriate statutory excuse is in place to protect the organisation against the imposition of a civil penalty should an employee later be found to be working illegally the UK. Right to work checks are simple enough to carry out, but they can be confusing because there are different requirements for different types of right to work. With compliance visits from the Home Office at an all-time high - up 50% on last year - it means that, more than ever, employers need to make sure their checks are carried out correctly.

So, let’s hear more on that. Alex Wright is an immigration specialist and earlier he joined me by video-link from Manchester to discuss it. First question – how significant is the tripling of penalties?:

Alex Wright: “The tripling of civil penalties is incredibly significant. They've been at the same level for quite a long time now. It used to be that if you had your first offence with the Home Office, if they found a legal working, it was £15,000. That’s now going to be £45,000 and if you're a repeat offender that's going to start at £20,000 and go up to £60,000. So, obviously there are significant impacts in terms of cost for employers because generally, particularly for large employers, if you've got right to work processes that aren't as effective as they could be, you're not just going to have one person slipping through the cracks, you might have multiple instances in which case you could be looking at really significant penalties and very large amounts indeed.”

Joe Glavina: “Are these new penalties retrospective, Alex, or do they only apply for breaches after 13 February?” 

Alex Wright: “The simple answer is for any civil penalties ongoing, then yes, you will be paying the new rate. What employers should also be aware of is that after employees leave they still remain liable for a period of two years. So, if you have somebody who was found to be working illegally within a two-year period of retroactivity, the Home Office can still potentially issue civil penalties against them.”

Joe Glavina: “You are advising on this every day, Alex, so you see the mistakes clients are making. So, typically, what are they getting wrong?” 

Alex Wright: “I would say that this is purely down to lack of consistency in procedural right to work checks. It's about different people in the company doing different things, not everybody knowing what the checks look like. There are three real ways to combat this in terms of the checks that you do. Essentially, if you have what's known as a statutory excuse, the Home Office cannot fine you. If you can show that you've got all the appropriate checks in place for a worker, even if it turns out they were later working unlawfully, if you've done everything that you're meant to do as an employer you are effectively untouchable, but what we see as employers not always having the right processes in place, not always doing the correct checks. So, there are three types of approved check. There are manual checks where you physically look at someone's document which are increasingly rare and unnecessary as we move to the digital systems, but they are most common for British and Irish nationals. There are digital checks which are for non-UK workers where the Home Office provides share codes where you can get a digital right to work check. Then there are what are known as IDSP providers, which is a fairly new thing that came in about a year and a half ago for British and Irish nationals to be checked by approved third parties and with all of these checks the employer still has to see the employee in person, either in person or on a Zoom call, to confirm they appear how they do in their check.”

Joe Glavina: “So, what’s your final message to viewers on this Alex?” 

Alex Wright: “Right to work checks aren't hard. They really aren't. They are very, very easy to get wrong, but they're also very, very easy to get right. If you've got a consistent procedure in place then you are not really going to have problems and we’ve noticed that generally with our clients the ones who've got procedures that are understood clearly by their teams throughout all of their offices are generally the ones that don't have any problems. It's people who try and kind of push things together, or maybe there are gaps between different members of the HR and recruitment team coming in, and the knowledge gets lost within the organisation. It's just about consistency and having clear and easy procedures that everybody can access and follow because ultimately it should be as easy as: is this your document. Is that you? Perfect.”

The tripling of the civil penalties came into force via statutory instrument with effect from 13 February 2024, and on the same day an updated code of practice was published on preventing illegal working. The new code should be applied to all right to work checks from 13 February 2024 onwards, including where a follow-up check is required to maintain a statutory excuse. We have put a link to that code of practice in the transcript of this programme for you. 

LINKS
- Link to Code of Practice: ‘Illegal working penalties: codes of practice for employers’