Civil Penalties for Hiring Illegal Workers: How Companies Can Prevent Penalties.
1. Civil Penalties for Illegal Employment in the UK
Employers in the UK who hire (or keep hiring) someone who is not authorised to work or who is working outside the terms of their immigration permit risk a civil penalty. Home Office Immigration Enforcement is responsible for enforcing the civil penalty regime, which is mainly governed by sections 15–25 of the Immigration, Asylum and Nationality Act 2006.
2. Increases in Civil Penalties for Employers in 2024–25
Penalties have increased significantly since February 13, 2024. For a first violation, the Home Office can now fine companies up to £45,000 per unlawful worker, and for further violations, up to £60,000 per person. A single mistake can be quite problematic for many firms, particularly SMEs, because of the high penalty levels.
According to recent enforcement reports, the Home Office is willing to impose severe penalties even in cases where the breach was unintentional due to human error or insufficient systems. Consequently, it is more crucial than ever for employers to examine their right-to-work policies to make sure they are in compliance and have a legal justification for unlawful labour.
3. Being Aware of the Statutory Justification for Illegal Employment
One important defence against being held accountable for hiring illegal workers is the statutory justification. You will typically not be subject to a civil penalty if you successfully complete the essential right-to-work checks prior to the commencement of your job (and follow-up checks if necessary). This article provides an outline of how businesses can include that justification into their hiring and HR processes and guarantee that right-to-work checks are performed correctly.
4. Typical Employer Errors That Lead to Civil Penalties
Investigations by the Home Office frequently reveal issues that are simple but simple to overlook, such as:
- checks completed after the first day or following “trial shifts” or training.
- utilising the incorrect approach (accepting ARC or BRP cards, which now need to be verified online, for example).
- Poor documentation (no dated proof of what was examined and when).
- In cases when permission is time-limited, failure to repeat inspections.
- Risk of impersonation (in digital checks if identity isn’t matched to the person in front of you).
Even when companies are attempting to act morally by doing right-to-work checks, these errors may still happen. Therefore, it is crucial to make sure that the statutory excuse is in place and that you have the right processes and procedures in place to prevent any of the aforementioned errors from occurring.
5. Perform Right-to-Work Examinations Prior to Hiring
Before beginning work, a compliance check must be done. This covers situations in which an employee participates in unpaid trials, shadowing, internships, or even works as a contractor—a situation in which they are essentially employees or may appear to be.
Pre-employment screening should include a right to work check.
6. Selecting the Appropriate Right-to-Work Check for Every Employee
A right to work check can be carried out in three different ways. The right approach will vary depending on the person and their UK status. The proposed worker must have the proper right to work check completed, as a wrong procedure could nullify the statutory excuse.
For British and Irish nationals, you can utilise approved paper papers or, if you work with a certified supplier, the Internet Digital Identity Service supplier (IDSP).
Employers will be able to perform an online right to work check on migrants who possess an e-Visa or digital status. You will be able to perform an online right-to-work check by using the share-code that the proposed employee can give you. For these migrants, a manual right to work check (i.e., just verifying and duplicating their identity document and BRP) is no longer allowed. Employers must also verify the potential employee’s identity, making sure that their identity document’s details and photo match the online check.
Employers should use the Employer’s Checking Service for individuals who are unable to use the online right to work check, such as those who have a pending appeal or application. The check may take up to five working days to arrive; it is not an instantaneous check. Only when you receive a positive verification notice is the statutory excuse established. It’s crucial to thoroughly review the notice before employment begins because positive checks will also outline any restrictions on an individual’s ability to work, such as whether they can only work a certain number of hours or exclusively for a sponsoring firm.
7. A Methodical Approach to Compliant Right-to-Work Verifications
The following procedures are followed in a compliance check, whether it is done manually or online:
- Make a copy, date it, and include the checker’s name in a clear record.
- Acquire the appropriate proof (sharing code or original documents, if relevant).
- Verify legitimacy in person (or online using a live video link), making that the photo corresponds with the person and the role is covered by the permission.
8. Stopping Identity Theft in Right-to-Work Verification
Imposters using real share codes that belong to someone else are a rising risk. Employers are expected to be aware of this by the Home Office. Employers should therefore make sure that they closely check the candidate’s digital profile photo to the digital profile photo, record a contemporaneous note verifying likeness, and teach staff on red signs (rushed candidates, refusal to reveal face properly on video, conflicting personal facts).
9. Diarising and Finishing Subsequent Right-to-Work Enquiries
Unless you repeat the check at the appropriate time, your statutory excuse will expire if someone has time-limited authority. To make sure the employee is submitting the proper application on time, employers should keep track of any permission expiration dates and follow up with the employee before the deadline. Employers might want to think about designating particular staff members to oversee the process and utilising a special calendar with alerts.
10. Regularly Carrying Out Internal Right-to-Work Examinations
Employers are advised to perform internal audits on a regular basis. Regular audits make it more likely that errors will be made and deadlines will be missed. We advise inspecting your files at least once a year, or more frequently if you can.
11. Educating Employees to Guarantee Right-to-Work Compliance
When a staff worker improvises a check without consulting the guidelines because they are unfamiliar with the proper procedures, civil penalties frequently follow. Because of this, it is a good idea to make sure that every employee involved in hiring or onboarding has received this kind of training. Every 12 months, refresher training ought to be provided as well.
To guarantee correct compliance, employers should also think about modifying their own policy documents and procedures.
12. Including Contractors and TUPE Transfers in Right-to-Work Compliance
Employers could still be at risk if
- you are aware of or have good grounds to suspect that someone is using a contractor to conduct illegal work;
- You hire employees through acquisition or TUPE without doing a necessary recheck.
13. Addressing a Notice of Civil Penalty
You should think about getting legal counsel if you receive a civil penalty notice. Depending on the situation, you might be able to object and appeal the notification. Employers should make sure that the fine is paid as soon as possible if an objection is not feasible or acceptable. There are discounts for faster payments (currently 30%).
14. Employer Right-to-Work Compliance Checklist
In conclusion, you can use the following straightforward checklist to ensure that you continue to fulfil your obligations as an employer:
- Before the employee begins work, perform a right-to-work check.
- Make use of the appropriate approach (online, manual, or IDSP).
- Verify if the person and the photo match.
- Make a note of any restrictions on an employee’s permission and make sure the job you are offering them conforms with them.
- The right to work check should be saved in your files.
- When necessary, Diarise will perform a follow-up check.
- To guarantee compliance, conduct internal audits on a regular basis.
15. Common Questions
1. What civil consequences result from hiring an undocumented worker?
Employers in the UK may be subject to civil penalties if they hire someone who is not authorised to work or who is violating their immigration regulations. In accordance with sections 15–25 of the Immigration, Asylum and Nationality Act of 2006, the Home Office enforces these fines.
2. What is the potential cost of civil penalties?
Fines for a first violation can exceed £45,000 per employee, and for repeated violations, they can reach £60,000 per employee as of February 13, 2024. Even unintentional mistakes brought on by human error or insufficient systems can result in penalties, as demonstrated by recent enforcement.
3. What is the legal justification?
Employers who properly complete the requisite right-to-work checks prior to the start of employment and any necessary follow-up checks are protected from civil penalties under the statutory excuse. Employers are generally protected against liability by following these procedures.
4. Right-to-work checks should be finished when?
Prior to beginning employment, a worker must perform right-to-work checks. This obligation is applicable to unpaid trials, internships, shadowing, contractors, and employees hired through TUPE transfers or acquisitions in addition to paid positions.
5. What kinds of checks are available for right-to-work?
The worker’s immigration status determines the sort of check. Physical documents or an online verification through a certified Digital Identity Service Provider can be used to verify British and Irish nationals. A sharing code must be used for an online check for migrants with an e-Visa or digital status. The Employer’s Checking Service should be used to verify employees who are unable to use the online system, such as those who have outstanding applications or appeals.
6. How can employers prevent errors when doing checks?
Late checks, incorrect verification methods, inadequate record keeping, not repeating checks when permission is time-limited, and identity fraud are examples of common mistakes. By following the three-step procedure—obtaining the appropriate proof, confirming it in front of the employee, and maintaining a dated record of the check—employers can prevent these errors.
7. Are transferred employees and contractors subject to civil penalties?
Indeed, businesses may still be held accountable if they deliberately hire someone who is working unlawfully through a contractor, agency, or by hiring employees through a TUPE transfer or acquisition without double-checking their employment eligibility.
8. If an employer receives a Civil Penalty Notice, what should they do?
Employers should think about getting legal counsel and figuring out whether they can object or file an appeal if a Civil Penalty Notice is issued. Faster payment savings of up to 30% may be available if an objection is not appropriate, thus the fine should be paid right away.