Civil penalties for employing illegal workers

UK employers are required by law to conduct right to work document checks on all employees prior to the start date of their employment, to avoid hiring illegal workers and ensure that all workers are legally permitted to live and work in the UK.

In the eyes of the law, an individual is employed if they are under a contract of employment, service, or apprenticeship, and although while still advisable, employers are not legally required to carry out right to work document checks on self-employed individuals or those doing work on a freelance basis.

There are numerous possible consequences for employers if they fail to conduct right to work checks on employees who are found to be unlawfully working in the UK. It is an imprisonable criminal offence to employ an individual working illegally, with liability extending to directors, partners, managers, and anyone who has responsibility for employment in an organisation.

The most common outcome for employers is the levying of a civil penalty of up to £20,000 per unlawful worker found to be employed, with there being no limit on how many civil penalties the Home Office may issue against a single business. If it is the first time (in a 3-year period) where an employer is found to have employed an illegal worker, the civil penalty will amount to £15,000 per unlawful worker. For the second time in a 3-year period, the civil penalty will be the maximum of £20,000 per illegal worker.

The Home Office publishes illegal working civil penalty reports containing the details of all civil penalties lodged against businesses (with names included) in the UK. Their latest report spanning the period of October 2019 to December 2020 (covering the onset and height of the Covid-19 pandemic) shows that in total across the UK, 627 civil penalties (amounting to £11,320,000) were issued, with the majority of penalties being issued in the London and South East region (245 civil penalties adding up to £4,625,000).

The numbers clearly show that civil penalties are a huge source of revenue for the Home Office and emphasise how important it is for employers to ensure they conduct right to work checks properly.

The civil penalty process begins with UK Immigration officials visiting a business premises when the Home Office suspects the business to be employing illegal workers. These types of visits can be made with or without notice, but are normally without prior notice being given.

If illegal workers are found during the visit, employers are given the opportunity during the visit to provide the UK Immigration officials with evidence that the required right to work document checks were conducted.

If the UK Immigration officials are satisfied with the documentary evidence provided during the visit, the employer in theory should be given a No Action Notice confirming that no civil penalty or further action will be issued in relation to the workers checked during the visit.

Alternatively, if the UK Immigration officials are not happy with the right to work check evidence shown during the visit, the case will be referred to the Civil Penalty Compliance Team, who will determine whether any civil penalties should be issued.

Once with the Civil Penalty Compliance Team, the case will be assessed following which the employer will be sent an Information Request. This is a crucial stage of the civil penalty process as the information and documents provided by the employer in response to the Information Request will determine the employer’s liability to a civil penalty, if any, and if found to be liable, the amount of the civil penalty.

Where illegal workers have been found, satisfactory documentary evidence of the correct right to work checks being carried out prior to the illegal worker’s employment commencing acts as a full statutory excuse (defence) against a civil penalty and providing this evidence in the response to the Information Request should result in the Civil Penalty Compliance Team deciding against a civil penalty, providing the employer with either a No Action Notice or a Warning Notice.

A Warning Notice acts as a formal warning for employers who have found to be employing illegal workers, who do not have the right to work documentary evidence to establish a statutory excuse but have met all the mitigating criteria to avoid a civil penalty and have not been issued with a civil penalty or Warning Notice in the three years prior.

If the Civil Penalty Compliance Team decides that a statutory excuse has not been established with the information and documents provided in the employer’s response to the Information Request, a Civil Penalty Notice will be served on the employer with full payment of the penalty being due within 28 days of the Notice.

If payment is made within three weeks, the penalty will be reduced by 30 percent, and there is also an option to request an instalment plan over a period of up to 24 months. Enforcement action will be taken if an employer does not pay a civil penalty, which may have an adverse impact on obtaining credit, acting as a director, submitting immigration applications, or sponsoring migrant workers in the future.

Employers have the right to formally object against a civil penalty within 28 days of the date of the Notice. The objection is the last opportunity before going to court to have a civil penalty cancelled, and if successful an employer will receive an Objection Outcome Notice confirming that the civil penalty has been cancelled or partially reduced.

If your business has received an Information Request or Civil Penalty Notice from the Home Office, please contact our UK immigration lawyers, who have a great deal of expertise in this area and who have successfully represented clients in quashing civil penalties at both the early and latter stages of the civil penalty process.

We can also assist your business with implementing the correct right to work check processes to avoid illegal workers and always ensure that your business has established a statutory excuse against any potential civil penalty.