The penalty for employing illegal workers: How to avoid the pitfalls

The food and drink industry has for many years relied heavily on workers from outside the UK. It has been particularly hard-hit by the Brexit vote leading to the end of free movement for EU citizens, and in many instances must now look to sponsored work routes in order to maintain staffing levels.

To ensure compliance with Home Office rules, employers should ensure they have sufficient policies and procedures in place to check employees have the right to work in the UK. This becomes more pressing as the Prime Minister​ ​has recently announced his intention to provide extra resources to immigration enforcement officers and increase raids on illegal working by 50%.

Checking that a worker has appropriate permission to work in the UK can be tricky. But what sanctions might an employer face if checks aren’t completed correctly? The short answer is – quite significant ones.

Civil Penalties​

The civil penalty scheme for employing workers illegally without having a statutory excuse for having done so was instituted from February 2008 and is primarily focused on financial sanctions. Unless you can show some form of mitigation, the penalty per illegal worker is £20,000. This reduces if you can demonstrate extenuating factors, such as proactively notifying the Home Office if illegal working is found; demonstrating your organisation has effective right to work checks despite this particular breach; compliance with a Home Office investigation; or if it’s a ‘first offence’.  

If faced with a civil penalty, employers should seek legal advice, whether in relation to mitigation or even a full challenge to the validity of the penalty notice. An employer may object to a civil penalty if they can prove they are not liable to it; 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.

Putting in a substantive notice of objection to a civil penalty, supported by evidence, can save a business many thousands of pounds. If 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 scheme, an employer may (far less frequently – there was only one prosecution between July 2019 and September 2021) face criminal sanctions if found to have employed a ‘disqualified person’. To prove guilt – to the criminal standard, beyond reasonable doubt, as opposed to the civil standard, is it more likely than not – the CPS must show that the employer either knowingly or (since July 2016) had reasonable cause to believe​ that an individual was working illegally.

A 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.

Any person who holds responsibility in a corporate body, partnership or as a sole trader – including a director, manager or company secretary – can find themselves subject to criminal sanctions.  

Whose responsibility? ​

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 prevent illegal working from taking place.  The situation changes significantly where agency staff are employed, with responsibility usually falling on the provider of labour rather than the client business.

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.

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.