Right to Work checks – The consequences of getting it wrong

Authored by ARAG

This article was written by Ben James and Ellen Parker on behalf of Ashfords Solicitors

Employers are required to carry out right to work checks before employing an individual to ensure that the candidate they want to employ is legally allowed to carry out the work in question in the UK. Employers must also ensure they carry out follow-up checks on existing employees whose right to work in the UK is time-limited. It is illegal for an employer to hire an individual in any capacity if they are disqualified from carrying out the work in question by reason of their immigration status. Although carrying out right to work checks can be onerous, it is important to ensure that the Home Office guidance is followed carefully, and accurate records are kept, so that the employer can establish a statutory excuse against a civil penalty. The consequences of employing illegal workers can be severe, but in circumstances where illegal working is discovered, an employer who has established a statutory excuse by correctly carrying out a right to work check will be excused from the civil penalties set out below.

Failure to comply

Failing to establish a statutory excuse by carrying out a right to work check correctly, or at all, can have serious repercussions that impact businesses where it matters most – financially, operationally and reputationally – when it transpires that the business has (even inadvertently) employed illegal workers. Below, we’ve taken a look at the possible penalties that employers may be hit with by the Home Office if they are found to have employed an illegal worker, and do not have the protection of a statutory excuse.

In most cases, each of the outcomes set out below would be preceded by the Home Office carrying out a site visit to audit the business and gather evidence of any suspected illegal working. These visits can be as a result of the Home Office being tipped off that an employer may be employing individuals without the right to work, or can be routine. The Home Office are able to request further information from the employer to aid their investigation and the employer is required to comply. If the Home Office are not satisfied by what is produced, or consider that it further evidences the suspected illegal working, they will take further action. Action will be taken in circumstances where the Home Office discovers an individual or individuals who do not have the right to carry out the work in question in the UK, and where the employer cannot provide satisfactory evidence that they have a statutory excuse.

Fines / Civil Penalties

In cases where illegal working is discovered and right to work checks have either not been carried out or have been carried out incorrectly, the most likely outcome is the employer receiving a civil penalty, i.e. a fine. The Home Office will issue the employer with a referral notice which will inform the employer that the case is being reviewed and that if they are found to have breached the rules, a Civil Penalty Notice will be issued and a fine of up to £20,000 may be payable in relation to each illegal worker. There is no limit on the number of fines that can be issued to a business.

Criminal Prosecution

Employing illegal workers is not just a civil matter; it can also give rise to criminal liability. If an employer is found to have employed an illegal worker, they could face prosecution, carrying a maximum sentence of five years imprisonment, and/or an unlimited fine. The employer may be found liable if they knew, or had reasonable cause to believe, that the individual:

a) Didn’t have permission to enter or remain in the UK;
b) Had overstayed their permitted period of leave;
c) Was not allowed to do the type of work they were being employed to do; or
d) Their papers were in any way falsified or fraudulent.

“Name and Shame” Reports

If an employer is found to have hired an illegal worker, there is also the risk of potential reputational damage to the business. The Home Office releases quarterly reports in which they “name and shame” employers that are found to have hired illegal workers. These reports are available publicly and are published region-by-region, containing the full name of the Company and details of the penalties imposed upon them.

Although it is easy for a business to accidentally fall foul of the immigration rules, many of those who see these reports published may immediately draw negative conclusions about a business. There is also the possibility that sanctions for employing illegal workers will be reported by the press, causing further damage to the business’ reputation. Therefore, it is vital that employers understand how to carry out proper work to checks and keep accurate records to ensure that they comply with the Home Office guidance.

Sponsor Licence – Revocation or Suspension

Another potential repercussion is that employers who have a sponsor licence (enabling them to sponsor migrant workers) in place may have this sponsor licence revoked, preventing them from recruiting or continuing to sponsor any migrant workers. For many businesses, the impact of losing a sponsor licence would be significant and would not only affect the business itself, but also the individuals that have been employed under the sponsor licence.

Revocation of a sponsor licence would require any migrant workers employed in the UK under that sponsor licence to leave their employment and subsequently leave the UK altogether within 60 days, unless they are able to make a suitable visa application to stay or find another employer willing to sponsor them.

If a business’ sponsor licence is revoked, they will have to wait until the ‘cooling off’ period of 12 months from the date of revocation has passed before they can apply for a new licence (and this application would be heavily scrutinised by the Home Office).

Suspension of a sponsor licence, although less serious than revocation, would still have a major impact on a business. It would prevent the employer from assigning further certificates of sponsorship, meaning it could not recruit additional migrant workers. Existing sponsored workers would be able to continue working for the business.

Director Disqualification

It is also possible that the company directors may be disqualified from being a director if they are found to have knowingly hired illegal workers. An individual can be disqualified for up to 15 years and within that period cannot be a director of any UK registered company, any overseas company with a connection to the UK or even be involved in forming, marketing or running a company. The individual’s name will also be publicly published on the Companies House database of disqualified directors. Breaching these restrictions – or the many others not summarised in this article – can result in a substantial fine or even a prison sentence of up to two years.

All employers should ensure they understand how to conduct right to work checks and have the correct procedures in place to carry them out. For more information about this, you can read our article about how to carry out right to work checks. Employers should also ensure that this information is communicated throughout the business to ensure that HR teams, managers or anyone else authorised to conduct a check knows how to do so and understands the importance of getting it right. Carrying out right to work checks correctly will protect a business from the sanctions set out above.