Illegal working fines set to triple: protecting employers

The UK Government has confirmed that from 22 January 2024, fines will triple for employers who hire anyone without permission to work in the biggest hike since 2014.

Civil penalties increase from up to £15,000 to up to £45,000 per illegal worker for a first breach. Repeated breaches could cost up to £60,000 (up from £20,000) per employee. Landlords who knowingly rent property to those without the right to rent face similar penalty hikes.

Many instances of non-compliance are accidental. It’s all too easy to make simple errors that can land a business in hot water and UK immigration law can often be confusing. Judges have described it as “a total nightmare” and having “a degree of complexity which even the Byzantine emperors would have envied”. 

With Prime Minister Rishi Sunak pledging more immigration staff and more enforcement, it is crucial that lawyers are aware of common right to work pitfalls, as well as employment lawyers advising on hires or TUPE and commercial lawyers advising on mergers and acquisitions.

Consequences

There are serious potential consequences for both employer and employee if they are working without permission or immigration status. Those employing someone illegally will be liable for the new heightened civil penalties unless they have the statutory excuse that comes with carrying out checks correctly.

It is a criminal offence to employ someone if you know or have reasonable cause to believe that they don’t have the right to work in the UK, punishable with an unlimited fine and/or imprisonment. 

If an employer has a licence to sponsor workers in the UK, breaches may impact their ability to retain or sponsor other workers. Working in breach of their immigration conditions can land an employee with a bar from returning to the UK of up to a year or, if UK Visas & Immigration (UKVI) believe deception was used, up to 10 years.

It is also a criminal offence for an individual to work in the UK if they know (or have reasonable cause to believe) they don’t have permission, punishable by imprisonment and seizure of illegal earnings.

Illegal working practices

Up to date right to work check practices are more crucial than ever.  Despite changes in recent years, these have not been amended with the new penalties (nor have the digital and documentary checks available to landlords.)

It’s also good practice for employers to carry out regular compliance audits of record-keeping, sponsor licence and reporting duties, as well as right to work checks. Staff visa expiry dates should be noted so that follow-up checks can be completed in good time.

If an employer discovers that they have been employing someone who did not have the right to carry out that work in the UK, it is possible to self-report this to UKVI.  If the employer has established a statutory excuse, they should not be liable a civil penalty.  If a statutory excuse was not established, the employer may be liable for a penalty (which they may otherwise not have received if UKVI were not aware of the issue) but reporting this through official channels can result in a reduction in the amount of the penalty.

When undergoing a merger or acquisition, or advising a client on one, it is important to consider right to work checks as part of your due diligence.  The acquiring company will inherit both the statutory excuse and any civil penalty liabilities of the acquired company, but there are ways to establish a new statutory excuse within a limited grace period where TUPE applies.

Right to Work

These must be carried out before employment starts to fully protect employers, many of whom are under the mistaken illusion that as long as a check is on the first day or so it counts.

If a new employee holds an eVisa, a Biometric Residence Card (BRC), a Biometric Residence Permit (BRP) or a Frontier Worker Permit (FWP) or has EU Settlement Scheme (EUSS) status, employers should conduct an online right to work check using the free Home Office online checking service.

Employers should conduct in-person checks if prospective employees’ physical documents are valid British and Irish passports or Irish passport cards.

Alternatively, they can now use one of the certified Identity Service Providers (IDSPs) using Identification Document Validation Technology (IDVT) to check one of the above valid documents.

We would always advise that where an employer is using one of the government certified IDSPs in a way that would afford them a statutory excuse, those advising them ensure the IDSP is an approved one and take the following steps to protect themselves:

• use an IDSP to check a prospective employee’s valid British or Irish passport (or Irish passport card) using IDVT;
• obtain an output of the IDVT identity check from the IDSP containing a copy of the IDVT identity check and the document checked in a legible format that cannot be altered;
• carry out their own due diligence to reasonably satisfy themselves that their chosen IDSP has completed the check in the prescribed manner;
• satisfy themselves that the photograph and biographic details (for example, date of birth) on the IDVT identity check are consistent with the individual presenting themselves for work;
• where names differ between documents, establish why and do not employ that individual unless they are satisfied documents relate to them. A statutory excuse will not be obtained where it is reasonably apparent that the prospective employee is not the individual linked to the identity verified by the IDSP;
• retain this information securely for the duration of employment and a further two years after. The copy must then be securely destroyed.

 Remote right to work checks brought in during the pandemic allowed employers to conduct checks on prospective staff without having to meet face-to-face, but these only provided employers with protection up to October 2022.

Sponsor licence compliance

Employers are often put off sponsoring potential employees for work visas due to the perception that compliance responsibilities are complex. However, the requirements are relatively straightforward and easy to understand once you get to grips with them.

To become a sponsor, an organisation must be able to meet certain responsibilities for record keeping, monitoring and reporting.  While these may require changes to managing HR systems and processes, these are generally common-sense procedures and you are likely to be doing many of them anyway as a matter of good HR practice.

For example, most employers will have copies of contracts, job descriptions and references from previous employers on personnel files and most will have a means of tracking and monitoring absences from work.

In most cases, becoming a sponsor, sponsoring a visa and managing the sponsor licence involves simply understanding UKVI’s expectations, keeping good records and being organised.

Ross Kennedy is senior client manager at Vanessa Ganguin Immigration Law