All UK-based employers have to comply with the law on preventing illegal working. Failure to do so could result in criminal and civil penalties and could seriously damage your business reputation. Here’s our guide for employers on carrying out right-to-work checks and preventing illegal working.
- The law on illegal working
- Who has a right to work in the UK?
- Delegating right-to-work checks – recruiters and contractors
- Carrying out right-to-work checks
- Defences to sanctions and prosecution for employing illegal workers
- Why are right-to-work checks important?
- Avoiding discrimination when preventing illegal working
- TUPE when preventing illegal working
- The penalties for employing illegal workers
- Tips on avoiding liability and preventing illegal working
The law on illegal working
The law states employers must prevent illegal working by verifying that all their employees, regardless of their nationality, have the right to work in the UK. The law applies to all UK employers who employ workers on written, verbal or implied contracts of employment or contracts of service or apprenticeship. There are penalties for non-compliance unless an employer can show that they have a statutory excuse.
The law on illegal working is not retrospective so employers don’t have to conduct right-to-work checks on employees who have been continuously employed by the business since before 29 February 2008.
Under the legislation, a UK employer is under a duty to check that an employee has a right to work in the UK and this duty extends to all employees whether they are British citizens, have settled status under the EU Settlement Scheme or where the employee is already known to the employer, such as a family member or friend.
Who has a right to work in the UK?
Business immigration solicitors advise that the right to work in the UK is based on immigration status. Whilst all British citizens have a right to work, others with the right to work include:
- Those with settled status - EU nationals or EEA citizens or Swiss citizens with pre or settled status under the EU Settlement Scheme
- Settled persons - those with indefinite leave to remain
- Work visa holders such as the skilled worker visa, senior or specialist worker visa or the graduate visa
- Some non-work visa holders whose visa conditions allow them to carry out some work. For example, student visa, family visa or dependant visa holders
The right to work can be non-time limited. For example, if the employee is a British citizen or has indefinite leave to remain in the UK. The right to work is time-limited if the employee has limited UK entry clearance. If an employee’s right to work is time-limited because of the terms of their visa, an employer must conduct a follow-up check shortly before the visa expires. Failure to do so places an employer in breach of illegal working legislation.
Business immigration solicitors say it’s important to keep up to date with changes. For example, prior to 31 December 2020, all EU nationals had the right to work in the UK on a non-time-limited basis. Now EU nationals with settled status have an indefinite right to work whilst EU nationals in the UK on work visas only have a time-limited right to work. Other EU nationals may have no right to work in the UK.
Delegating right-to-work checks – recruiters and contractors
If an employer recruits staff through a recruitment agency, the employer cannot rely on an assurance by the recruiter that the recruiter carried out a right-to-work check to avoid liability under the illegal working legislation. Therefore, even if a recruitment agency assures an employer that they conducted right-to-work checks on their job candidates, it is still essential that the employer carries out its own checks to obtain a statutory defence under the illegal working legislation.
Contractors should carry out right-to-work checks on their employees but businesses that regularly use a contracted workforce may insist on checking that their contractors have carried out the checks on their employees. That’s because of the potential disruption and reputational damage to the employer flowing from losing all or part of a contractor workforce if the Home Office investigate and uncovers illegal working.
Carrying out right-to-work checks
To comply with illegal working legislation, a right-to-work check must be conducted by an employer on a prospective employee before the employee commences employment and must be repeated if the worker only has a limited right to work in the UK.
The rules surrounding right-to-work checks and how they must be carried out to secure a statutory defence depend on the date of employment. For historical information on right-to-work checks take a look at An employer's guide to right-to-work checks: 6 April 2022.
A right-to-work check can be carried out manually, using IDVT via the services of an identity service provider (IDSP), or using the Home Office online check. If any of these options is carried out correctly an employer gets a statutory defence to criminal prosecution or a civil fine.
An employer can use the Employer Checking Service where a prospective or current employee has an outstanding visa application, administrative review or appeal, or if their immigration status requires verification by the Home Office.
Business immigration solicitors recommend that where possible employers use the Home Office online check as that avoids the risk of staff failing to carry out a manual check properly, for example, by not asking for sight of the correct documents as specified in the Home Office guidance. You can access the online check here but the person who is being checked will need to provide a share code that is valid for 90 days.
Employers cannot use the online tool to conduct all right-to-work checks as some employees are unable to use the system because of their status and documents. If you have to rely on a manual check the correct documents must be seen. Annex A of the guide provides the list of documents. If you prefer to rely on the services of a digital provider, they must be authorised providers of right-to-work checks. For more information on using IDSP services look at Annex D of the guide.
Defences to sanctions and prosecution for employing illegal workers
A company has a statutory defence to criminal or civil prosecution for employing illegal workers if they carried out a right-to-work check in accordance with the relevant Home Office guidance. However, the company is still liable if a member of their staff forgot or failed to carry out the check properly.
In addition, to secure a defence an employer must not:
- Carry out a right-to-work check after the employee commences work although the check can be conducted on the first day of employment and repeated if necessary
- Employ a worker in circumstances where it was reasonably apparent that the worker is not the holder of the documentation supplied as part of a manual check or it was reasonably apparent that the paperwork provided was false. The Home Office deem ‘reasonably apparent’ to mean that a person untrained in the identification of false documents examining the paperwork briefly without technological equipment could reasonably be expected to see that the document was false
- Conduct an online check if it is reasonably apparent that the website used to carry out the check was not the official Home Office online service or the check wasn’t completed properly online
- Employ a worker in a role inconsistent with visa conditions. For example, a skilled worker visa holder requires a sponsoring employer with a sponsor licence
- Fail to repeat a check on a worker who only has a time-limited right to work
Why are right-to-work checks important?
The importance of carrying out right-to-work checks is not limited to avoiding civil penalties or criminal sanctions. Right-to-work checks are a vital part of the recruitment and HR function because they reduce:
- The risk of reputational damage and adverse publicity arising from the employment of illegal workers or accusations of exploitation of vulnerable people who do not have the right to work in the UK
- The potential for business disruption through illegal workers being removed from employment because of Home Office investigations
- Sponsor licence problems – with the potential for an initial application to be refused or the rejection of a renewal application or the suspension or revocation of an existing sponsor licence. For more information read our article on Sponsor Licence Application | Guidance For Employers
Avoiding discrimination when preventing illegal working
Employers must avoid discrimination when preventing illegal working. Right-to-work checks must be carried out on all new employees, regardless of their nationality or race and it’s important that staff tasked with conducting the checks explain to prospective employees (and existing employees with time-limited entry clearance) that employers are legally obligated (rather than choosing) to carry out the checks.
If an existing employee does not have a permanent right to work in the UK and the employer has to carry out additional checks, it can lead to allegations of discrimination. To avoid discrimination claims it is sensible for employers to sensitively help employees to understand why they are being asked to participate in any additional checks.
For additional reading, the Home Office has produced a guide ‘avoiding discrimination while preventing illegal working: code of practice’ that details how to avoid discrimination claims.
TUPE when preventing illegal working
If an employer takes on employees under TUPE arrangements on the sale or transfer of an existing business, the law states that any right-to-work checks carried out by a transferor of a business are deemed to have been carried out by the acquiring business under the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations 2006.
Although the acquiring business can rely on the right-to-work check carried out on TUPE employees, they don’t have a statutory defence if the checks were not carried out correctly, meaning that they will be liable if a TUPE employee who started work on or after the 29th February 2008 is found to be an illegal worker. Therefore, as a precaution, the employer should carry out fresh checks within 60 days from the TUPE date.
The penalties for employing illegal workers
The penalties for employing illegal workers range from financial penalties to revoking the company sponsor licence to a closure order. All of these penalties can have a massive impact on the profitability of the business, as well as create enormous reputational damage and disruption to the employer and the business. The penalties for employing illegal workers are summarised as:
- Civil liability –The maximum civil penalty fine for employing illegal workers without a statutory excuse is £20,000 per illegal worker. A civil penalty notice sets out the financial penalty and the date by which the penalty must be paid. If an employer receives a civil penalty notice they should take legal advice on potential defences, mitigating factors to reduce the size of the financial penalty, and the potential impact of a fine on the continuation of their sponsor licence or other industry-related licence. The Home Office immigration enforcement documents explain the civil liability procedure in more detail
- Criminal liability – In cases of serious illegal working, employers can be prosecuted. If convicted, the offence carries a prison sentence of up to 5 years and an unlimited fine. Examples of illegal working cases regarded as serious include where there has been a blatant disregard for the illegal working legislation and the requirement to carry out checks and/or the employment of vulnerable persons liable to exploitation. In addition to the prosecution of the employer, the illegal worker can face criminal prosecution with a maximum sentence of 6 months imprisonment and/or an unlimited fine
- Closure orders –This order is made by a court and gives immigration officials wide powers of inspection as part of the compliance order. The closure notice prevents paid or voluntary work from being undertaken on the employer’s premises during the continuation of the closure notice
- Additional consequences of employing illegal workers – Most businesses can recover from the financial consequences of a civil penalty notice. However, they may struggle to overcome the reputational damage and loss of trade of a business owner being disqualified as a director of the company, the revocation or suspension of a sponsor licence and the consequent business disruption and recruitment challenges, and the review of specific industry related licences such as licences in the alcohol and late-night refreshment sector
For more information on this topic take a look at our article on What to do if your business is prosecuted for illegal working.
Tips on avoiding liability and preventing illegal working
it isn’t possible to have a fail-safe system to avoid liability when preventing illegal working but some tips help reduce the risks of liability, such as:
- Ensuring that you and your HR staff know and comply with the law on illegal working and right-to-work checks (and any changes in the law and guidance) so the business has a statutory excuse or defence if you are found to have employed a member of staff who does not have a right to work in the UK
- Having HR systems in place that are easy for your HR staff to follow, such as computerised personnel file management and diary systems
- Provision of regular HR training on topics such as avoiding discrimination in the recruitment of staff and the conduct of right-to-work checks on both recruits and existing employees who are subject to immigration controls.
- Consider the use of a sponsor licence management service to help ensure that your recruitment policies and procedures are fully compliant with the illegal working legislation to minimise the risk of being in breach of the law on illegal working