As part of the hostile environment, the Immigration, Asylum and Nationality Act 2006 (the “2006 Act”) mandates that employers are required to perform the role of authority by carrying out right-to-work checks on potential employees. If an employer fails to carry out these checks properly, they can face significant financial and reputational repercussions.

Under Section 15 of the 2006 Act, the Secretary of State can impose a significant civil penalty if an employer fails to conduct a proper right-to-work check and the employee is found not to have the legal right to work in the UK.

You can also verify an applicant’s right to work using an identity service provider offering Identity Document Validation Technology (IDVT). You can find further information about IDVT in the employer’s guide to right-to-work checks.

Verify a Job Applicant’s Right to Work in the UK: Using Their Share Code

You can confirm a job applicant’s right to work in the UK, including:

  • The types of work they are permitted to do.
  • The duration they are allowed to work in the UK if there are any time restrictions.

To perform this check, you will need:

  • The applicant’s date of birth.
  • Their right-to-work share code.

If the share code is unavailable, you can verify the applicant’s original documents as an alternative.

Checking Documents for Right to Work in the UK

This service helps you determine:

  • Which types of documents grant someone the right to work in the UK?
  • What steps are involved in conducting a right-to-work check for each document type?

Increasing Penalties and Enforcement

Government data indicates a sharp rise in civil penalties for illegal employment since 2021. The number of penalties issued in the first quarter of 2024 is four times higher than in the last quarter of 2021. Additionally, after the Labour Government took office in July 2024, illegal working inspections increased by 34%, and arrests rose by 25% compared to the same period in the previous year.

As of February 13, 2024, the penalties for employing illegal workers have significantly increased:

  1. First offence: £45,000 per worker (up from £15,000).
  2. Second offence: £60,000 per worker (up from £20,000).

Mitigating Factors and Penalty Reductions

The Secretary of State’s Code of Practice outlines three mitigating factors that can reduce penalties:

  1. A £5,000 reduction if the employer self-reports the illegal worker.
  2. A £5,000 reduction for actively cooperating with the investigation.
  3. A further £5,000 reduction if the employer demonstrates effective right-to-work practices.

If all mitigating factors are met, the Secretary of State may issue a Warning Notice instead of a penalty.

Employers also have the option to pay penalties in instalments and can avail of a 30% discount for payments made within 21 days under the “Fast Payment Option.” Importantly, payment of the penalty does not imply an admission of liability, and employers can still appeal or object while benefiting from the discount.

Civil Penalty Appeals

Employers who disagree with a penalty can:

  1. Submit an objection to the Secretary of State, arguing statutory excuses or that the penalty amount is excessive.
  2. If objections are unsuccessful, they can appeal under Section 17 of the 2006 Act.

Appeals are heard in the County Court and involve a rehearing of the case, where the burden of proof often falls on the employer. Employers must prove:

  • They did not employ the individual.
  • The individual had the right to work in the UK.
  • They carried out the required right-to-work checks.

The lack of clear guidance from courts regarding the burden of proof creates challenges, as employers must often provide substantial evidence to support their claims.

Defining Employment

The term “employment” under the 2006 Act refers to a contract of service or apprenticeship, whether oral or written. Courts have debated whether casual work, volunteering, or self-employment falls under this definition. In some cases, judges have ruled that these arrangements do not constitute employment, although the Secretary of State often argues for a broader interpretation.

Individuals as Employers

Individuals employing household staff must also conduct right-to-work checks. Penalties for individuals are the same as for businesses, and their names and addresses may be published, raising privacy concerns.

Representations can be made to the Secretary of State to prevent publication, especially where personal safety or privacy is at risk.

Directors of businesses may face stricter enforcement actions if they are found liable for a penalty, particularly if they choose to close the business without paying the penalty. The Insolvency Service is increasingly targeting such directors, and they can expect to be banned from participating, either directly or indirectly, in the promotion, formation, or management of a limited company for a period of six to ten years as a consequence of employing illegal workers. Additionally, they may be required to cover the costs associated with enforcement actions.

Conclusion

With civil penalties and enforcement actions on the rise, businesses and individuals must be diligent in conducting right-to-work checks. The significant increase in penalty amounts is likely to encourage more employers to challenge these penalties, making it critical for practitioners to understand the nuances of this regime. Employers should act proactively to mitigate risks, maintain proper records, and ensure compliance to avoid severe financial and reputational damage.

FAQs

1. What is the penalty for employing an illegal worker in the UK?

The penalty for employing an illegal worker is:

  • £45,000 per worker for a first offence.
  • £60,000 per worker for a second offence.
    These increased penalties apply to breaches occurring after 13 February 2024.

2. Can employers reduce the penalty amount?

Yes, employers may reduce the penalty by meeting certain mitigating factors:

  • A £5,000 reduction for self-reporting the illegal worker.
  • A £5,000 reduction for actively cooperating with the investigation.
  • A further £5,000 reduction if the employer has effective right-to-work practices.

If all these criteria are met, the Secretary of State may issue a Warning Notice instead of a penalty.

3. What is a right-to-work check, and how is it performed?

A right-to-work check verifies that a prospective employee has legal permission to work in the UK. This involves:

  1. Checking original documents that prove the individual’s right to work.
  2. Verifying the authenticity of the documents in the presence of the individual.
  3. Retaining a copy of the documents for your records.

Employers can also use the Home Office’s online right-to-work checking service.

4. Can employers appeal against a civil penalty notice?

Yes, employers can appeal if they believe:

  • They are not liable for the penalty.
  • They have a statutory excuse (e.g., they conducted proper checks).
  • The penalty amount is excessive.

Appeals are heard in the County Court and involve a rehearing of the case. Employers can also object to the penalty directly with the Secretary of State before appealing.

5. Are individuals liable for penalties if they employ staff in their households?

Yes, individuals employing household staff (e.g., nannies or cleaners) are required to conduct right-to-work checks. Penalties for individuals are the same as for businesses, and their names and home addresses may be published if found liable.

Representations can be made to prevent publication, particularly if privacy or safety concerns exist.