For businesses, particularly those involved in international hiring, the process of verifying an employee’s right to work in the UK can appear daunting, and employing illegal workers in the UK can attract significant penalties for businesses.
It’s vital for employers to familiarise themselves with the Home Office’s 2022 Code of Practice on Preventing Illegal Working, as failure to comply with these regulations can lead to severe financial and legal consequences. Ensuring compliance is especially important when hiring from overseas, as the complexities of business immigration law of demand careful attention.
This compliance is not only a matter of adhering to legal requirements but also a reflection of a business’s commitment to ethical practices and social responsibility. In this context, staying informed about potential penalties and ensuring rigorous adherence to legal standards is essential for maintaining operational integrity and avoiding detrimental outcomes.
Understanding the civil penalties
Employing someone without the right to work in the UK can lead to a civil penalty of up to £20,000 per illegal worker. This can be particularly burdensome for smaller businesses. Moreover, changes announced by the Home Office in August 2023 indicate a significant increase in these penalties. From January 2024, the fine for a first breach in illegal working will rise from £15,000 to £45,000 for each worker, and for subsequent breaches, from £20,000 to £60,000 per worker.
However, there are avenues for reducing this penalty. If a business demonstrates an effective right-to-work check system or cooperates fully with a Home Office investigation, especially in first-time offences, the financial penalty might be reduced.
Additionally, businesses holding a sponsor licence face further complications if found employing illegal workers. The Home Office could impose ‘special measures’ or, in more severe cases, suspend or revoke the licence, which would disrupt the business and affect sponsored employees.
The situation is different for businesses with multiple recruitment sites. An organisation would only be labelled a repeat offender if illegal working is a systemic issue in its recruitment practices. When acquiring a new company, there is a 60-day grace period under TUPE regulations to ensure all employees are legally employed.
Legal advice becomes critical if a business receives a notice of a potential civil penalty. There are possibilities to appeal against the penalty if the company can prove it was not liable or had a valid statutory excuse. In cases where the penalty is unaffordably high, requesting leniency could also be an option. A well-supported notice of objection can potentially save a business thousands of pounds.
Potential for criminal sanctions
Beyond civil penalties, businesses must be aware of the potential for criminal sanctions. These are less common but carry severe implications. Between July 2019 and September 2021, there was only one recorded prosecution. For a criminal conviction, the Crown Prosecution Service (CPS) must prove beyond a reasonable doubt that the employer knowingly employed an illegal worker or had reasonable cause to believe so.
In the Crown Court in England and Wales, the employer could face an unlimited fine, a confiscation order, and imprisonment for up to five years. In a Magistrates’ Court, the penalties include a fine of up to £5,000 and up to six months imprisonment. Similar sanctions apply in Scotland.
Individuals in positions of responsibility within the organisation, like directors and managers, may also face personal criminal proceedings, adding personal risk for those in leadership roles.
Who bears responsibility?
Determining legal responsibility for illegal employment can be complex, particularly for companies engaging in various types of employment. Generally, the direct employer is responsible for ensuring legal employment. This holds true regardless of the nature of the contract – whether written, oral or implied.
When engaging self-employed individuals or freelancers, the question of liability often arises. The law broadly defines ‘employment’ to include not just traditional paid employment but also unpaid roles, work placements and self-employment. Therefore, businesses must conduct right-to-work checks on all workers categories.
For companies using external contractors provided by another organisation, such as a staffing agency, the legal liability typically rests with the agency. However, it is best practice for the employer to ensure these contractors have undergone the necessary right-to-work checks. While not legally liable, failing to do so could pose reputational risks and be perceived as a lack of due diligence by the Home Office.
UK companies can also use Identification Document Service Providers (IDSPs) employing Identification Document Validity Technology (IDVT) to verify the legal status of British and Irish citizens. This can provide a statutory excuse, reducing liability under the civil penalty scheme.
Businesses seeking to employ workers from abroad must handle the complexities of UK immigration law. A proactive approach involving meticulous planning and robust procedures is essential to avoid significant financial and legal repercussions. Treating immigration checks lightly can result in costly consequences.
For more advice, contact Latitude Law on 0207 046 7185 or visit www.latitudelaw.com
Managing Partner
Latitude Law