Penalties triple with Home Office updated code of practice on preventing illegal working

26 January 2024

The Home Office code of practice on preventing illegal working has been updated following this month’s parliamentary votes, marking the most substantial escalation in civil penalties for employers hiring individuals without proper work authorization since 2014. Effective from February 13, 2024, right to work fines triple, reaching up to £45,000 per worker for initial breaches and £60,000 per worker for repeated violations. Landlords renting to migrants without proper documentation also face heightened penalties.

Legal consequences of right to work breaches

The escalating civil penalties coincide with a renewed focus on immigration enforcement by UK Visas and Immigration (UKVI). With an increased workforce dedicated to immigration enforcement, compliance visits on employers holding sponsor licences have become more frequent.

The Immigration (Employment of Adults Subject to Immigration Control) (Maximum Penalty) (Amendment) Order 2023 has now been approved by the House of Commons and the House of Lords, which means maximum civil penalties for employing people without permission to work are tripling in February.

It is a criminal offence to employ someone if an employer is aware or has reasonable cause to believe the worker has no right to work in the UK, punishable with unlimited fines and/or imprisonment.

Breaches may also impact a company’s sponsor licence, limiting its ability to sponsor or retain migrant workers.

Employees working in breach of immigration conditions may face 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. If an employee knows or has reasonable cause to believe they are in breach, they may face criminal sanctions too – imprisonment and seizure of illegal earnings.

Mitigating risks: best practices for employers

To shield themselves from these new hefty illegal working penalties, employers must use up-to-date right to work check practices. Carrying these out correctly will afford employers a statutory excuse to prevent civil penalties.

Regular compliance audits, encompassing right to work practices, record-keeping, sponsor licence obligations, and reporting duties, are advisable. Employers must pay close attention to employees’ visa expiry dates and ensure compliance with immigration conditions.

Employers engaging students should ensure adherence to stipulated conditions, such as part-time hours restrictions and not filling a full-time permanent vacancy, unless an exception applies.

Mergers and acquisitions should consider right to work checks as part of due diligence to mitigate potential liabilities. 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.

Reporting non-compliance incidents

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, potentially reducing penalties. With a statutory excuse from carrying out correct checks, employers should not be liable to pay any civil penalty.

Guidelines for conducting right to work checks

Employers must conduct right to work checks before employment commences, with a follow-up check as the visa expiry dates looms.

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.

There are concessions on what documentation Ukrainian nationals may use to prove their right to work.

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.

To be sure they have a statutory excuse we would advise employers to use a government certified IDSP, ensure the IDSP is approved 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.

Sponsor licence compliance

In most cases, becoming a sponsor, sponsoring a migrant and managing an organisation’s sponsor licence involves simply understanding what UKVI expects of you, keeping good records and being organised.

Being a sponsor involves meeting responsibilities for record-keeping, monitoring, and reporting, complying with UK immigration law and wider UK law – which should all align with good HR practices. For example, most employers will have copies of employee contracts, job descriptions and references from previous employers on personnel files and most will have a means of tracking and monitoring absences from work.

Failure to keep on top of compliance requirements can result in license suspensions, and revocations. There is also a potential risk of employers facing unfair dismissal action if a work contract is terminated due to sponsor non-compliance.

For a free conversation about any concerns raised contact us on 0207 033 9527 or at enquiries@vanessaganguin.com.