Employers face higher penalties for illegal working. How to avoid them

11 August 2023

Employers hit with tripling illegal working fines

Fines are set to more than triple for employers and landlords who employ or rent to those without permission to work or rent – in the biggest shake up of civil penalties since 2014, the Home Office has announced. These higher penalties will commence from the start of 2024.

The civil penalty for employers, last increased in 2014, will be raised from up to £15,000 to up to £45,000 per illegal worker for a first breach. The fine for repeated breaches will be increased from £20,000 to up to £60,000.

The penalty for landlords renting to someone without permission to rent will be hiked up from from £80 per lodger and £1,000 per occupier for a first breach to up to £5,000 per lodger and £10,000 per occupier. Repeat breaches will entail fines of up to £10,000 per lodger and £20,000 per occupier, up from £500 and £3,000 respectively.

The Home Office announcement this week also warned that it would “consult on options to strengthen action against licensed businesses who are employing illegal workers.”

Increased illegal working enforcement

These announcements are part of a headline-grabbing set of recent announcements about immigration policy and enforcement. Last month the Prime Minister announced a hike in visa fees of 15 per cent and upwards (which we expect in the autumn), with the compulsory Immigration Health Surcharge set to increase by 64 per cent (expected start of next year).

In December Rishi Sunak pledged more immigration enforcement staff and a 50 per cent increase in raids on illegal working and this has been reflected in an increase in compliance visits on employers with sponsor licences to employ immigrant workers.

According to the Home Office almost 5,000 civil penalties have been issued to employers since the start of 2018, with a total value of £88.4m. Landlords have been fined £215,500 in over 320 civil penalties in the same period.

Employers can protect themselves from these hefty fines by using the latest post-pandemic regime of digital and physical right to work checks which I recently wrote about. This has not changed with the new penalties and neither has the digital and documentary checks available to landlords.

It’s also good practice for employers to carry out regular compliance audits and we can help advise on and help conduct such reviews of checks, record-keeping and sponsor licence duties. Contact Ross@vanessaganguin.com for more information.

How to conduct Right to Work checks in 2023

Since October 2022 remote right to work checks brought in during the pandemic to allow employers to conduct checks on prospective staff without having to meet face-to-face have ended. Human resources staff should be conducting in-person checks if the physical documents are valid British and Irish passports or Irish passport cards.

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

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.

You can find further guidance on this and the concession on what documentation Ukrainian nationals will need to prove their right to work here.

We provide specialist advice on the range of illegal working offences, best practices to avoid them, how to mitigate and report lapses and how to respond if you fall foul.

Avoiding Right to Work errors

It is easy to make small mistakes such as conducting a right to work check after a new employee has started work, or relying on an IDSP for a check on an employee who is not British or Irish.

Reacting to the announcement of higher penalties by Immigration Minister Robert Jenrick, Kate Shoesmith, deputy CEO at the Recruitment and Employment Confederation, warned many instances of non-compliance are accidental.

“The government should support businesses who are trying to do the right things and have good intentions. The majority who fall foul have administrative errors, for example using expired passports, which is currently not allowed,” she explained.

“At the end of the day, businesses are also unable to prevent someone from providing false information so we need to be clear where the liability falls when something like that happens.”

She also warned of confusion about which providers to use for right to work checks. Speaking to HR magazine, she said: “Employers are now able to do right to work checks online, which is exactly what we need in this day and age. However, it is important to ensure you have all the appropriate checks, whether in person or online. There’s been an awful lot of conversation about digital service providers for right to work checks. The government runs a list of approved services but as an employer you aren’t legally required to use one of those.

“This can be confusing to people who are susceptible to get burned by a dodgy provider. I think it could be fairer if all providers subject to the same standards.”

We would always advise that where an employer is using one of the government certified Identity Service Providers (IDSPs), an employer still retains Right to Work checks and should still take the following steps before employment commences to ensure a proscribed check has been undertaken:

• 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 clear, legible format that cannot be altered;
• carry out their own due diligence to satisfy themselves to a reasonable belief that their chosen IDSP has completed the check correctly in the prescribed manner;
• satisfy themselves that the photograph and biographic details (for example, date of birth) on the output from the IDVT identity check are consistent with the individual presenting themselves for work (i.e. the information provided by the check relates to the individual and they are not an imposter);
• where names differ between documents, establish why this is the case and must not employ that individual unless they are satisfied that the 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 which was verified by the IDSP;
• retain this information securely for the duration of employment and for a further two years after the employment has ended. The copy must then be securely destroyed.

If you would like to discuss your procedures or help conducting a compliance audit to ensure your processes are up to date, for instance before a sponsor licence renewal, please contact us sooner rather than later.

We can advise on all aspects of right to work check rules and how to avoid civil penalties, criminal sanction and related adverse consequences by having fully compliant right to work checks and sponsor licence compliance.