Increases to Illegal Working Penalties for Employers
Pam Sidhu, Partner & Head of Business Immigration reports on sharp increases to the civil penalties payable by employers if they are found to employ staff who do not have the appropriate immigration permission to work in the UK. The change will take effect from 13 February 2024.
Pam Sidhu comments:
“This signifies a significant strengthening of the regime by the government to ensure that employers do not employ illegal workers who do not have the right to live and work in the UK. It is now increasingly important that employers rigorously carry out the appropriate right to work checks in line with the government guidance, in order to ensure they benefit from a statutory excuse in the event that workers are found not to have the appropriate visa permission in place. The cost of getting it wrong could be extremely costly.”
What are the changes to the civil penalties regime?
The current maximum civil penalty levels for non-compliant employers are as follows;
- £15,000 (per worker) for the first breach;
- £20,000 (per worker) for subsequent breaches within three years.
The penalties have been tripled to the following;
- £45,000 (per worker) for the first breach;
- £60,000 (per worker) for subsequent breaches within three years.
The rationale for the changes is said to be to aim to change the behaviour of non-compliant employers and to eliminate financial benefit of such non-compliance, as well as to ‘restore the harm caused’ by non-compliance and to deter future non-compliance. Such changes are said to be ‘proportionate to the nature of the offence and the harm caused.’
How can the penalties be reduced?
Reductions may be applied to penalties if there are mitigating factors, as set out below. Furthermore, employers can qualify for a 30% reduction to the penalty if it is a first penalty and payment is made in full within 21 days. It is likely that the Home Office will start at the maximum penalty and reduce this as appropriate, for example where a statutory excuse exists or where there has been no prior breach within the past 3 years.
There are three mitigating factors, the last of which can reduce the penalty to a warning rather than a fine:
- A reduction of £5,000 can be made for employers who have already made a report of suspected illegal working to the Home Office.
- A reduction of £5,000 can be made when an employer ‘co-operates’ with the Home Office.
- A warning rather than a fine may be given where an employer has effective right to work checking processes.
Employers can object to penalties so long as this is done in writing within 28 days of receipt.
The essential take away for employers is to ensure they have their own robust right to work checking processes and to routinely report suspected illegal working. We can assist with implementation of the appropriate right to work checking processes and defending claims of illegal working.
If you have any queries arising from this update please contact Pam Sidhu on [email protected] or any member of the Employment & Business Immigration Team.
