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Illegal working sanctions on employers tightened

In July, new regulations brought into force measures in the Immigration Act 2016 to tackle illegal working, bolstering existing immigration legislation.

This article has been co-authored by Louise Benski and Fieldfisher Immigration Specialist Gillian McKearney.

In July, new regulations brought into force measures in the Immigration Act 2016 to tackle illegal working, bolstering existing immigration legislation.  Such measures now make it easier for the Government to penalise not only individuals working without permission, or in breach of their conditions of stay, but also those employing them.  This is the latest in a raft of recent immigration measures intended to create a "hostile environment" for illegal migrants in Britain.

The new measures reinforce employers' duties to carry out document checks on all potential employees before they start work.  Under section 15 of the Immigration, Asylum and Nationality Act 2006, an employer may be liable for a civil penalty for employing an illegal worker of up to £20,000 per worker.  An employer may have a statutory defence against a civil penalty if they can prove that they carried out the necessary right to work checks.

Larger organisations with sophisticated HR processes will no doubt have staff specifically responsible for checking workers' right to work in the UK.  However, immigration law is changing at pace.  Given the Government's focus on enforcement action against illegal immigrants in the UK, especially post-referendum, adapting your existing checks and record-keeping processes (or establishing new ones, if your organisation is a start-up or SME) is crucial.

Key Changes

  1. Extension of the criminal offence of knowingly employing an illegal immigrant, which now includes circumstances where an employer has "reasonable cause to believe" that a person is an illegal worker.  Previously, it was a criminal offence when an employer "knowingly" employed an illegal worker. This change addresses employers who shut their eyes to issues of immigration status; for example, employers can be prosecuted where they have deliberately ignored information or circumstances that would have caused them to know that the employee lacked permission to work.
  2. Creation of a new criminal offence of illegal working, which would allow illegal workers' earnings to be seized under the Proceeds of Crime Act 2002.
  3. New power to appoint a Director of Labour Market Enforcement.  He or she would oversee enforcement by the (newly renamed) Gangmasters and Labour Abuse Authority, Employment Standards Inspectorate and HMRC (see our Employment Law Journal article 'Crime and Punishment' on labour market exploitation, and the trend towards state enforcement of employment law rights, for more details).

New policy guidance came out on 12 July 2016 which addresses these changes.

What is at stake for employers?

The existing civil penalty (a fine of up to £20,000 for each illegal worker employed) may be imposed if an organisation employs someone without the right to undertake the work for which they are employed. This is unless you carried out the right to work checks using acceptable documents before employment commenced (the 'statutory excuse'). 

Criminal liability, which does not benefit from the statutory excuse, carries a prison sentence, and / or unlimited fine. The maximum sentence for this has now been increased (from two to five years – a sobering thought).  Remember that if the existing criminal offence is committed by a body corporate with the consent of an officer (who may be a director, manager or secretary or a person acting as such), that officer, as well as the corporate entity, may be treated as having committed the offence.

The Home Office is enforcing the law.  In the second half of 2015, 522 civil penalties were issued in the London and South East region with a gross value of £9,060,000, although these may have subsequently been reduced following objections and / or appeals.

There is also the possibility of adverse publicity.   Byron Burger were praised by the Home Office by reporting its suspicion that employees had provided false documents.   But they have also faced adverse and unwelcome publicity following the Home Office's raid.

Protecting your business

You should:

  • Check that documents shows permission to work before employing a person into your organisation. This involves checking the person's original documents, in the presence of the holder, and retaining a copy which is certified, signed and dated. The checks are required for all employees, including British nationals and settled workers.  For there to be a valid statutory defence, the check must be made by an employee of your organisation and as employer you must show that the check was taken at the appropriate time.

  • Follow up with repeat checks, for staff with a time limit on their immigration status, prior to their visa expiry date.  From 16 May 2014, it is no longer mandatory to carry out annual repeat checks on those holding temporary visas. However, we recommend that these are continued and that members of staff are trained in completing the checks.

  • Ensure that your organisation has a system in place to provide for staff to complete the checks at the correct time.  Staff must identify whether a visa allows the holder to carry out the work in question and they should check for any restrictions on employment. For example, international students are normally restricted to working 10 or 20 hours per week during term time.  Staff must also check that the documents provided are genuine.

This area of law is still developing and further powers are likely to be brought into force in future; for example, ordering the closure of businesses continuing to employ illegal workers. Organisations should update internal checking processes and ensure that any offers of employment made are subject to an applicant producing the required documentary evidence, to show that they have the right to work in the UK.  Contracts should also be updated to include right to work warranties given by employees (or workers), if they do not already contain these. 

If you would like assistance on any of the matters raised above, please do not hesitate to contact any member of our Employment team.


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