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What to do if your business is prosecuted for illegal working

If your business is being prosecuted for illegal working there will be both short term and long term financial consequences for you, an impact on your sponsor licence, if applicable, as well as the reputational damage that a prosecution brings. In this blog we look at what you should do if your business is prosecuted for illegal working.

Why has your business been prosecuted for illegal working?

Your business can face civil action by the Home Office or criminal prosecution for illegal working if you employ a worker who you knew or had reasonable cause to believe did not have the right to work in the UK.

Prosecution for not preventing illegal working occurs if you do not comply with the law on carrying out right to work checks. For more information see our guide to right to work checks can be found here.

The prevention of illegal working legislation is contained in the Immigration Act 2016 and the Immigration, Asylum and Nationality Act 2006. The legislation on preventing illegal working says an employer is deemed to have committed a criminal offence if you are found to be employing a person aged sixteen or over who is subject to immigration control unless:

  • The employee has current leave to be in the UK, and
  • The employee has valid permission to do the type of work for which you have employed them.

Illegal working can include many different scenarios, such as:

  • Employing a worker who does not have permission to enter the UK (an illegal immigrant) or no longer has permission to remain in the UK (an overstayer), or
  • Employing someone who has permission to be in the UK but their visa category does not allow them to work (a visitor on a visit visa) or to carry out the type of work or the hours of work that you employed them to do.

Criminal prosecution for illegal working is more likely to occur when it is thought that you knowingly employed illegal workers for personal financial gain rather than say your lack of understanding of illegal working legislation or not fully completing the right to work check on your employee.

Who is categorised as an illegal worker?

An illegal worker is categorised as someone who is:

  • Subject to UK immigration control,
  • Over the age of sixteen,
  • Not allowed to work, or to do certain types of work, or work in excess of specified hours, because of their immigration status, and
  • Nonetheless is in employment in breach of their visa conditions or entry clearance.

The main point for any employer is that illegal working covers many different scenarios such as:

  • The non-EEA national student who is working more hours than their visa permits.
  • The person on a UK visit visa and who is therefore a lawful entrant to the UK but is not entitled to work.
  • The employee on a Tier 2 (General) visa who is carrying out different work to that detailed on the Resident Labour Market Test and the Certificate of Sponsorship.

Any type of illegal working is in breach of the illegal working legislation although if the breach is unintended it will be treated by the Home Office and Crown Prosecution Service in a different light to whole scale flouting of the illegal working legislation. All employers should have an awareness of the Home Office guide to preventing illegal working .

What penalties could be issued for employing illegal workers?

The penalties issued for employing illegal workers depend on whether you are facing a criminal prosecution or a Civil Penalty Notice.

The criminal offences and penalties are:

Criminal offence Penalty
Criminal prosecution for knowingly employing an illegal migrant worker   You could be imprisoned for up to two years and/or receive an unlimited fine and you may be disbarred as a company director or company officer as a result of the criminal prosecution
Criminal prosecution for having in your possession or under your control without reasonable excuse an identity document that is false or improperly obtained or which belongs to someone else You could be imprisoned for up to two years and/or receive an unlimited fine and you may be disbarred as a company director or company officer as a result of the criminal prosecution
Criminal prosecution for trafficking You could be imprisoned for up to fourteen years and/or receive an unlimited fine and you may be disbarred as a company director or company officer as a result of the criminal prosecution  

As an alternative to criminal prosecution for illegal working you could receive a civil penalty or fine if you employ someone who does not have the right to work in the UK and you did not either do the right to work check, or you did not do it correctly.

If you employ illegal workers who do not have the right to work in the UK then you could be issued with a Civil Penalty Notice for employing the illegal workers. The Home Office Immigration Enforcement section can impose a civil penalty of up to £20,000 per illegal worker.

The size of the fine or civil penalty will be influenced by:

  • Whether you co-operated with the Home Office investigation
  • Whether you have previously been investigated and fined for not preventing illegal working
  • The extent to which you carried out right to work checks and the extent to which you did not comply with the law on illegal working and right to work checks.

If you receive a civil penalty for illegal working you may also:

  • Have your business included in a publication detailing companies fined for breaching illegal working legislation. The Home Office publishes names of fined companies as a deterrent and to warn other businesses of the consequences of not complying with illegal working legislation and employing illegal workers. The reputational damage of appearing in the publication can be as damaging to your business as the illegal working fine or Civil Penalty Notice
  • In addition to the Civil Penalty Notice and fine, you could also face an investigation into your sponsor licence and a sponsor compliance visit by a Home Office official. This could result in your sponsor licence being downgraded, suspended or revoked and to your not being able to employ non-EEA nationals in future. You may think that you will just apply for another sponsor licence if your licence is revoked but the Home Office can impose a twelve month cooling off period if you have not complied with illegal working legislation. This means that you would not be able to apply for a new sponsor licence for twelve months and until you secure a new sponsor licence you would not be able to sponsor any non-EEA nationals to work for you.

What is the Home Office process for issuing penalty notices?

If a Home Office official decides that you have not complied with the illegal working legislation and not correctly completed right to work checks then you could be issued with a ‘Referral Notice’.

A Referral Notice does not necessarily mean that the company will be fined. The notice just means that the matter is referred to the Home Office to decide on what action to take. The potential Home Office actions are:

  • No Action Notice
  • Warning Notice
  • Civil Penalty Notice to pay a fine

Obviously everyone hopes that the Home Office will decide on a No Action Notice but a Civil Penalty Notice will be issued if the Home Office believes you have employed an employee or employees who do not have the right to work in the UK or who were employed by you outside of their visa conditions and you do not have a defence.

The Civil Penalty Notice will state:

  • The amount of the fine
  • The date for payment
  • How you can object to a Civil Penalty

The amount of the fine imposed by the Home Office will depend on a range of factors as the Home Office imposes a sliding scale to calculate the fine, depending on what the Home Office official assesses the circumstances of the illegal working and any mitigating factors, such as:

  • First offence
  • Cooperation with Home Office investigation
  • History of reporting suspicions to the Home Office
  • Process failure in carrying out a right to work check rather than total non-compliance with the illegal working legislation

Appealing penalty notices if you are prosecuted for illegal working

If you receive a Civil Penalty Notice you can object to the penalty notice or, if your objection fails, appeal against it. If you want to object then you must do so within twenty eight days from the date on your Civil Penalty Notice.

There are various grounds for objecting to a Civil Penalty Notice, including:

  • You are not the employer
  • Although the employee was working illegally, you carried out the right to work check properly and therefore have a statutory excuse
  • You will be overburdened by the amount of the penalty

A Home Office official will consider the objection and notify you of the outcome. The Home Office new decision will be supported by a Statement of Case explaining the reasoning behind the Home Office decision on your objection.  When responding to your objection the Home Office could issue:

  • A Warning Notice in place of the Civil Penalty Notice
  • An increase in the fine under the Civil Penalty Notice
  • Notification that the Civil Penalty Notice has been cancelled or maintained at its original level or reduced

If the outcome of the objection is to maintain the Civil Penalty Notice or increase the fine then you can apply to the County Court to appeal the decision. You have twenty eight days from the date of the objection decision within which to start appeal proceedings.

The grounds for appeal are the same as for putting forward an objection. You can appeal if:

  1. Your objection has been considered by the Home Office and you want to reject the Home Office decision and have grounds to do so
  2. The Home Office have not informed you of their decision on your objection within twenty eight days

Prior to launching an objection or an appeal against a Civil Penalty Notice it is sensible to take legal advice on your prospects of success. Remember that ignoring the Civil Penalty Notice is not the answer as the Home Office will take enforcement action.

Home Office enforcement action could affect:

  • The continuation of your sponsor licence. Read our guide to sponsor licences
  • Your credit rating
  • Your company image and increase reputational damage
  • Your immigration record and ability to secure a new visa or apply for Indefinite Leave to Remain if you are subject to immigration control in the UK

If you agree to pay the Civil Penalty Notice then the Home Office may agree a payment plan with you or offer a thirty percent discount for payment of the Civil Penalty Notice within twenty one days.

Closure orders as a result of prosecution for illegal working

The Immigration Act 2016 introduced Closure Orders as an additional deterrent to those employers who persistently employ illegal workers or flout the illegal working legislation.

To make a Closure Order the relevant Home Office official has to be satisfied that:

  • Illegal working is occurring.
  • The employer or manager has been convicted of an offence under section 21 or section 25 of the Immigration, Asylum and Nationality Act 2006 or has, in the past three years, been required to pay a fine under the 2006 Act or pay a Civil Penalty Notice.

Closure Orders are rare but if made last for either twenty four or forty eight hours. Home Office statistics reveal that only twenty five Closure Orders have been made in the UK over the period from 2016 to 2019 and in the year 2018 to 2019 only one Closure Order was made.

 Compliance orders as a result of prosecution for illegal working

The Home Office can apply to Court for a Compliance Order to prevent an employer from employing illegal workers.  A Compliance Order is serious as it can result in the closure of business premises for up to twelve months and is therefore only used for the most serious breaches of illegal working legislation.

Civil defences for prosecution for illegal working

There is a civil defence from prosecution for illegal working and Civil Penalty Notice from the Home Office. The defence is also referred to as a ‘statutory excuse’.

 If you employ a non-EEA worker who is subject to immigration control and it turns out that they are working illegally you will have a defence to the imposition of a Civil Penalty Notice (or statutory excuse) if you carried out the right to work check in accordance with the illegal working legislation and Home Office guidance.

Given the potential civil fine of £20,000 per illegal worker , the reputational damage through the Home Office publishing details of companies fined for employing illegal workers and the potential loss of your sponsor licence and thus your ability to continue to employ your existing non-EEA workers and any future non-EEA national recruits, the importance of company directors and HR teams understanding the right to work checks and having easy to follow and well documented procedures in place cannot be overstated. 

Consequences for high-risk areas of the economy

Some industries are seen as ‘high risk’ industries for illegal working, such as restaurant, entertainment and licensed taxi businesses. The civil and criminal penalties for illegal working are the same if you are an employer in an industry that is deemed either high risk or low risk for illegal working. However, when it comes to high risk industries who are reliant on local council licences to operate (for example, premises licences for the sale of food or alcohol or a licence to operate taxis for private hire) you could risk losing your licence as well as facing a criminal conviction or Civil Penalty Notice. The loss of your licence to trade effectively puts you out of business and unable to get another licence to set up again.

Criminal defences for prosecution for illegal working

In 2006 the government introduced a criminal offence for employing a person who was not legally allowed to work in the UK because of their immigration status. In 2016, the law was changed so that now you can be found guilty of a criminal offence not only  if you knowingly employ an illegal worker but if you have ‘reasonable cause to believe’ that the employee did not have the right to work.

The defence to a criminal prosecution for employing an illegal worker is that you did not have reasonable cause to believe that the non-EEA worker did not have the right to work in the UK. To succeed on a defence of this nature you need to be able to show, for example, that you carried out the right to work checks but were fooled by fraudulent paperwork or other reasonable explanation.

Consequences for illegal workers

If you work illegally in the UK then it isn’t just the employer who faces criminal prosecution, the employee does as well.

If you take up employment either knowing that you do not have the legal right to work in the UK, or having reason to believe that you do not have the right to work,  then you could be prosecuted for the offence of illegal working and potentially receive a custodial sentence.

In addition to having a criminal record any conviction will be relevant when the Home Office assesses any application for a visa extension, switching to a Tier 2 (General) visa or Indefinite Leave to Remain application. The consequences for an employee of illegal working can therefore be as far reaching as for an employer.

What to do if your sponsor licence has been revoked for illegal working

If your sponsor licence is revoked for illegal working then you will either need to consider challenging the decision or reassessing your workforce and recruitment needs as you will not be able to continue to employ your existing non-EEA workers or recruit any new non-EEA workers.

How to respond to being prosecuted for illegal working

If you face a civil investigation or criminal prosecution for illegal working then it can be tempting to ignore the problem but that won't make it go away. The first thing you will need to do is take legal advice as business immigration solicitors can advise you on your options and how best to try to extricate yourself from the situation you find yourself in and to minimise the potential financial and reputational damage of a civil investigation or criminal prosecution.

Long-term actions to take after being prosecuted for illegal working

When it comes to long-term actions to take after being prosecuted for illegal working the best tips are:

  • If you have a sponsor licence, then you may face a sponsor compliance visit. You will need to work with the Home Office to show that you have learnt your lesson from being prosecuted for illegal working to try to hang onto your sponsor licence. You could, for example, show that you have employed a professional sponsor licence management service to carry out your sponsor licence duties and your right to work checks as well as undergoing an external audit of HR files or your investing in additional training or HR management systems
  • If you have lost your sponsor licence or had it suspended or downgraded then as well as taking legal advice about how best to successfully apply for a new sponsor licence or for reinstatement of your A grade you may need recruitment advice on how to attract sufficient workers who are either UK citizens , have Settled Status or are from EU countries
  • In addition to legal advice on how to ensure that you fully comply with the illegal working legislation and right to work checks in future you may need employment law advice if you are facing not being able to continue to employ your existing non-EEA workers as a result of the revocation of your sponsor licence
  • As prosecution for illegal working cab result in long term reputational damage you may find it helpful to work with a public relations expert specialising in reputational damage management so that you can put any adverse publicity over the illegal working behind you as quickly as possible
  • After you have been prosecuted for illegal working you are likely to be on the radar for increased scrutiny by not only the Home Office but other government departments, such as HMRC. That means that you need to work with your legal and accountancy and other risk management advisors to ensure that you are able to put the prosecution for illegal working behind you and rebuild your business

What next?

If you are an employer and you are facing prosecution for illegal working or if your sponsor licence has been revoked as a result of a pending illegal working prosecution then our business immigration law solicitors can help. Call us on 0800 689 1700 or fill out this short form. We aim to respond to all messages received within 24 hours.

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