Civil Penalties for Illegal Working

In the UK, employers have a legal responsibility to make sure that every person they hire has the right to work. This sounds simple, but the reality can be more complicated, especially with changing immigration rules and increased Home Office enforcement. When something goes wrong,  even unintentionally,  the consequences can be serious. If the Home Office believes a business has hired someone who is not permitted to work, and the correct checks were not completed, they can issue what is known as a civil penalty for illegal working.

These penalties can be financially damaging and extremely disruptive for any organisation. In recent years, the Home Office has become far more active in investigating employers, carrying out site visits and asking for employee documentation. For businesses, this can be a worrying and confusing experience, particularly when they believed they were doing everything correctly. This article can provide insight on how civil penalties work and what we can do to help.

What Is a Civil Penalty for Illegal Working?

A civil penalty is a financial fine issued by the Home Office to an employer who is believed to have hired someone who is not legally allowed to work in the UK. Although it is not a criminal conviction, it can still cause serious harm to a business because the penalties are high.

As of February 2024, employers can now face up to £45,000 per worker for a first breach and up to £60,000 per worker for repeat breaches within three years. These fines apply per worker, meaning the total amount can add up quickly if more than one worker is involved.

A worker is considered to be working illegally if they do not have permission to work in the UK, if their visa has expired, if their visa conditions do not allow them to do the particular job, or if they relied on false or invalid documents. Importantly, an employer can still face a penalty even if they genuinely did not realise there was an issue if the proper right to work checks were not carried out, the employer may still be held liable.

How Brexit Changed Things

Brexit brought about one of the most significant changes to right to work rules in decades. Before Brexit, EU, EEA and Swiss citizens could work in the UK freely. Employers only needed to check a passport or national ID card, and many businesses relied on this for years. After Brexit, this changed completely, most European nationals now need immigration permission in the same way as non-EU nationals, unless they have status under the EU Settlement Scheme. A European passport alone is no longer enough to prove the right to work. In many cases, employers must carry out a Home Office online right to work check.

This change has led to confusion and accidental non compliance, especially for employers who continued to rely on pre Brexit practices. As a result, the Home Office has increased enforcement activity and has been quicker to issue civil penalties. Businesses now need to be far more careful and make sure their staff understand the updated rules.

How Investigations Begin

A Home Office investigation can begin in several ways, sometimes it starts with an on site visit. In other cases, the Home Office receives information from another agency, a compliance audit reveals issues, or the business holds a Sponsor Licence and is subject to routine checks.

During an investigation, the Home Office may request copies of employment contracts, right to work checks, payroll information, rotas, and details about who is responsible for recruitment and HR decisions. They will look closely at how the business operates and whether the correct procedures were followed.

If they believe a breach has occurred, they will issue a Civil Penalty Notice, which outlines the penalty amount, the evidence relied upon, and the employer’s rights to challenge the penalty.

What Happens When a Civil Penalty Notice Is Issued

Under Section 15 of the Immigration, Asylum and Nationality Act 2006, the Home Office have the authority to impose a civil penalty if an organisation has employed someone who is not allowed to work in the UK and they cannot rely on a statutory excuse.

Although, receiving a Civil Penalty Notice can feel overwhelming, especially for businesses that believed they were compliant. We can assist to identify potential grounds for challenge and can guide the company through the process to minimise the impact on the organisation.

Many penalties can be reduced or cancelled if the employer can show that they did not employ the individual, that the correct right-to-work checks were done, or that the Home Office made an error. A well-prepared response, supported by evidence, can significantly improve the employer’s chances of achieving a positive outcome.

Client Successes

Our firm has helped many employers successfully navigate civil penalty investigations. In one recent case, the Home Office carried out a routine compliance visit to one of our client’s premises and alleged that our client had employed a worker illegally. The client was understandably distressed and the potential fine was substantial.

The Home Office referred our client to the Civil Penalty Compliance Team who issued our client a Referral Notice and they were required to respond within 10 working days.

We carried out an internal review and discovered that the individual in question was not employed by the company at all. There were no employment records, no payroll entries and no contractual links to this individual. We also explained the structure of the business, making it clear that staffing decisions were made by a separate entity within the group. We gathered evidence, prepared detailed written submissions and presented a clear explanation to the Home Office.

After reviewing our representations, the Home Office accepted that our client was not the employer and took no further action. This avoided a significant financial penalty and protected the business’s reputation.

Conclusie

Civil penalties for illegal working can feel overwhelming, especially when they arrive unexpectedly or when you believed your business was fully compliant. The fines are high, the rules are strict and the Home Office often moves quickly.

You do not have to deal with this alone. Many penalties can be challenged, reduced or completely cancelled with the right legal guidance and a well prepared response.

If you have received a Civil Penalty Notice, or if the Home Office has contacted you about an investigation, please get in touch with us as soon as possible. Early action makes a significant difference to the outcome. Our immigration team is here to support you, protect your business and help you achieve the best possible result.