Checking that a prospective employee has the relevant permission to work in the UK is an important, albeit sometimes tricky, process. The checks that an employer must undertake, and the way in which they must be done, are set out in the Code of Practice on Preventing Illegal Working dated 22 April 2022. If checks are not completed correctly, the sanctions can be significant. 

Civil Penalties
The civil penalty scheme, which imposes a duty on employers to prevent illegal working in the UK, and applies if an employer is found to be employing workers illegally without having a statutory excuse for having done so, mainly focuses on financial sanctions; the penalty can be up to £20,000, per illegal worker. This penalty can be reduced if you are able to demonstrate mitigating factors such as demonstrating your organisation has effective right to work checks despite this particular breach; proactively notifying the Home Office if illegal working is found; complying with the Home Office investigation; or if it’s a ‘first offence’. 

It is worth noting that if your organisation holds a sponsor licence to employ migrant workers, the Home Office may decide to place this into a form of ‘special measures’, or to suspend or revoke the licence completely. 

If you operate several sites and recruitment is devolved to each one, you’ll only be considered a repeat offender if Home Office investigators conclude that illegal working is due to a general failure in your centrally-run recruitment practices. If you acquire a new business, and employees are transferred under TUPE, you will have a 60-day grace period in which to ensure everyone is legally employed.

If your organisation is faced with a civil penalty, we would recommend seeking legal advice, whether that be in relation to mitigation, or even to challenge the validity of the penalty notice in its entirety. An employer may object to a civil penalty if they can prove they are not liable to it; that they hold a statutory excuse for having employed the work in question; or if the amount is too high for the business to reasonably pay. Submitting a substantive notice of objection to a civil penalty, together with supporting evidence, can save a business thousands of pounds. In the event that the objection isn’t accepted by the Home Office, there is a right of appeal to the County Court. 

Criminal sanctions
In addition to the civil penalty scheme, an employer may face criminal sanctions if they are found to have employed a ‘disqualified person’. However, criminal sanctions are far less frequent; there was only one prosecution between July 2019 and September 2021. To prove guilt, the CPS must show that the employer either knowingly or (since July 2016), had reasonable cause to believe that an individual was working illegally. Guilt must be proven at the criminal standard, ‘beyond reasonable doubt’, as opposed to the civil standard of ‘is it more likely than not’. 

Conviction can result, if the case is dealt with in the Crown Court in England and Wales, in an unlimited fine, a confiscation order, and up to 5 years in prison. If it stays in the Magistrates Court, you face a fine of £5,000 and up to 6 months’ imprisonment. Sanctions are similar in Scotland. 

Criminal sanctions can be imposed upon any person who holds responsibility in a corporate body, partnership or as a sole trader, including a director, manager or company secretary. 

Who is responsible?
Usually this will be an easy question to answer; an employer who has directly taken on a worker under a contract, written oral or implied, bears the responsibility to ensure no illegal working.  

It is possible for a business to use an external Identification Document Service Provider (IDSP) making use of Identification Document Validation Technology (IDVT) to verify British and Irish citizens’ rights.  In that case, the IDSP’s positive check provides an employer with a statutory excuse under the civil penalty scheme, so a limited element of responsibility-sharing exists. 

However, who is responsible when a business is working with self-employed individuals who are working under a contract for services? Could the business be held liable if it fails to check work permissions for the individuals concerned? 

In our view – yes, this is possible. The Immigration Rules broadly define ‘Employment’ to include:

‘[P]aid and unpaid employment, paid and unpaid work placements undertaken as part of a course or period of study, self-employment and engaging in business or any professional activity.’    

Right to work guidance, however, is less clear, but certainly a business could suffer reputational damage if found to be employing self-employed contractors, so it is best to avoid that possibility.

For employers using external contractors on their sites, who are supplied by another organisation such as an agency, there is no legal liability. Home Office guidance does however describe it as best practice to confirm your contractors conduct compliant right to work checks, and we would certainly endorse this view. Responsibility in this instance therefore stops with the agency or organisation supplying the labour.

This is, in summary, a complex area, where there is much to be gained by planning in advance, putting robust procedures in place, and above all taking your responsibilities seriously. So often we see immigration checks as an afterthought for businesses – an approach that can prove costly.