If your business is being prosecuted for illegal working there will be short and long-term financial consequences, 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?
- Who is categorised as an illegal worker?
- What penalties could be issued for employing illegal workers?
- What is the Home Office process for issuing penalty notices?
- Appealing penalty notices if you are prosecuted for illegal working
- Closure orders as a result of prosecution for illegal working
- Compliance orders as a result of prosecution for illegal working
- Civil defences for prosecution for illegal working
- Consequences for high-risk area of the economy
- Criminal defences for prosecution for illegal working
- Consequences for high-risk areas of the economy
- Criminal defences for prosecution for illegal working
- Consequences for illegal workers
- What to do if your sponsor licence has been revoked for illegal working
- How to respond to being prosecuted for illegal working
- Long-term actions to take after being prosecuted for illegal working
Why has your business been prosecuted for illegal working?
Your business can face civil action or criminal prosecution for illegal working if you employ a worker whom 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 an employer does not comply with the law on carrying out right-to-work checks. For more information see our guide to right to work checks.
The prevention of illegal working legislation is contained in the Immigration Act 2016 and the Immigration, Asylum and Nationality Act 2006. The legislation says an employer is deemed to have committed a criminal offence if found to be employing a person aged 16 or over who is subject to immigration control unless the employee has valid leave to be in the UK and permission to do the work they have been employed to do.
Illegal working can include 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)
- 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 a business knowingly employed illegal workers for financial gain rather than due to a lack of understanding of illegal working legislation or not fully completing a right-to-work check.
Who is categorised as an illegal worker?
An illegal worker is someone who is:
- Subject to UK immigration control
- Over the age of 16
- Not allowed to work, do certain types of work, or work more than specified hours because of their immigration status
- 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 international student who is working more hours than their student visa permits
- A UK visit visa holder who is not entitled to work other than carrying out permissible business activities
- The employee on a skilled worker visa who is carrying out different work than that detailed on their certificate of sponsorship
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 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 14 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. The Home Office Immigration Enforcement section can impose a civil penalty of up to £20,000 per illegal worker.
The size of the fine is 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 details disclosed - the Home Office publishes names of fined companies as a deterrent to warn other businesses of the consequences of 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
- 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 in your not being able to employ sponsored workers 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 12-month cooling-off period if you have not complied with illegal working legislation
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 have not correctly completed right-to-work checks then you could be issued with a ‘Referral Notice’.
A Referral Notice 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
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. The Home Office imposes a sliding scale to calculate the fine, depending on the circumstances of the illegal working and any mitigating factors, such as:
- First offence
- Cooperation with the 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 28 days from the date of the 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 checks 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. Any new decision will be supported by a Statement of Case explaining the reasoning behind the Home Office’s decision on your objection. The Home Office could:
- Issue a Warning Notice in place of the Civil Penalty Notice
- Increase the fine
- Notify you that the Civil Penalty Notice has been cancelled, maintained or reduced
If the outcome of the objection is to maintain the Civil Penalty Notice or increase the fine, you can apply to the County Court to appeal the decision. You have 28 days from the date of the objection decision to start appeal proceedings.
The grounds for appeal are the same as for putting forward an objection. You can appeal if:
- Your objection has been considered by the Home Office and you have the grounds to reject the Home Office’s decision or
- The Home Office has not informed you of their decision on your objection within 28 days
Before launching an objection or an appeal against a Civil Penalty Notice it is sensible to take legal advice on your prospects of success as Home Office enforcement action could affect:
- The continuation of your sponsor licence
- Your credit rating
- Your company image and branding strategy
- Your immigration record and ability to secure a new visa or apply to settle in the UK 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 on a payment plan with you or offer a 30% discount for payment of the Civil Penalty Notice within 21 days.
Closure orders as a result of prosecution for illegal working
The Immigration Act 2016 introduced Closure Orders as an additional deterrent to employers who persistently employ illegal workers or flout the illegal working legislation.
To make a Closure Order the Home Office must be satisfied that the:
- 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 24 or 48 hours.
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 12 months and is therefore only used for the most serious breaches of illegal working legislation.
Civil defences for prosecution for illegal working
The civil defence from prosecution for illegal working and Civil Penalty Notice is referred to as a ‘statutory excuse’.
If you employ a worker who is subject to immigration control and is working illegally you 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 the latest Home Office guidance.
Given the potential civil fine of £20,000 per illegal worker, 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 area 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 high-risk areas of the economy
Some industries are seen as ‘high risk’ industries for illegal working, such as restaurants, 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 or low risk for illegal working. However, high-risk industries 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) could risk losing their council licence to trade as well as facing a criminal conviction or Civil Penalty Notice.
Criminal defences for prosecution for illegal working
An employer can be found guilty of a criminal offence if they knowingly employed an illegal worker or if they had reasonable cause to believe the employee did not have the right to work.
The defence to criminal prosecution for employing an illegal worker is that you did not have reasonable cause to believe that the worker did not have the right to work in the UK. To succeed in this defence, 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.
Taking 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, means you could be prosecuted for the offence of illegal working and potentially receive a custodial sentence.
Any conviction will be relevant when the Home Office assesses any application for a visa switch extension or settlement application.
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.
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 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 reinstatement of your A grade you may need recruitment advice on how to attract sufficient non-sponsored workers 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 unable to continue to employ your sponsored workers as a result of the revocation of your sponsor licence
- As prosecution for illegal working can 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 the Home Office and other government departments, such as HMRC. You need to work with your legal and accountancy and other risk management advisors to ensure that you can put the prosecution for illegal working behind you and rebuild your business