The consequence of illegal working for your business

In this piece, Gemma Goodhead, head of immigration at SA Law, explains why it's critical to check the right to work of your employees.

It has been recently reported that many employers are unaware of their duty to check the right to work of their employees and of the consequences of illegal working in the UK.

It is illegal to employ someone aged 16 or over without the right to work in the UK. The Home Office imposes a duty on all employers in the UK to complete a ‘right to work’ check on their employees, even when they are a British citizen. There is now closer cooperation and coordination between the Home Office and other government agencies (eg HMRC) to detect illegal working. Failure to conduct checks in the right manner, together with a finding of illegal working can have disastrous consequences on the employer (both the business and individuals within the business who are involved with the hiring of staff) and the employee.

Who has the right to work in the UK?

Currently, all UK, EEA, and Swiss nationals have the automatic right to reside and work in the UK and only require their passports to evidence this. The government is proposing to preserve the right to stay and work in the UK for those EEA nationals residing in the UK before a ‘specified date’ (to be determined) while those who entered the UK after that date are likely to be subject to a new visa regime. Non-UK/Swiss/EEA nationals require an appropriate visa to work in the UK.

What are right to work checks?

Right to work checks involve the employer checking (before they start work) the employees’ immigration status (whether their passport, visa, and/or another immigration document) to confirm they hold the right to work in the UK. You are also required to conduct a follow-up check on people who have time-limited permission to work in the UK. You cannot rely on a third party, eg a recruitment agency to conduct the right to work checks for you.

To remain within the law when employing new staff, both now and post-Brexit, employers should check the employee’s immigration documents on or before their first day, before permitting them to complete any work. If the employee forgets or refuses to bring their documents on their first day, the employer should not permit them to work until this requirement has been satisfied. The Home Office has created a useful guide for those unsure on what they can accept as a ‘right to work’ document and how to complete the ‘right to work’ check.

Should employers become aware/if they suspect that an employee may have lost the right to work in the UK, they need to take prompt action, taking steps to end the employee’s employment (following a fair process) if the right to work cannot be established.

Please note that the guidance relating to hiring students, asylum seekers, non-EEA family members of EEA nationals, voluntary workers and volunteers are particularly complex and you should seek legal advice.

Do I only need to check the right to work of ’employees’?

The Home Office guidance applies to those who ’employ staff under a contract of employment, service or apprenticeship, whether expressed or implied and whether oral or in writing’. However, even if you are not the direct employer of the workers involved in your business, there are compelling reasons why you should seek to know that your workers have a right to work including the risk of reputational damage, disruption to operations, and the impact on health and safety and safeguarding obligations. The guidance recommends that where you are not the direct employer, you should check that they (ie the contractor) has conducted adequate right to work checks for these workers. If your business is hiring self-employed workers directly, we also recommend carrying out right to work checks.

If your business is buying another and employees are transferring under TUPE, you should take legal advice on the timings and manner of right to work checks as part of your due diligence process.

How to conduct a right to work check

1. Obtain the person’s original documents as specified in List A or List B
2. Check the validity of the documents in the presence of the holder (check the document (eg does it look original, has it expired, has it been tampered with, are names consistent etc?) and the appearance of the holder (ie does the photograph correspond with the person in front of you?); and
3. Make and retain a clear copy, and make a record of the date of the check. Sign and date the copy.

More detailed guidance on conducting right to work checks can be found at: https://www.gov.uk/government/collections/employers-illegal-working-penalties

What are the consequences of employing someone without the right to work in the UK?

A recent report found up to 93 per cent of PBS Sponsor Licence holders risk losing their licence as a result of compliance failings in their attempts to prevent illegal working. For those licence holders, this could impact their ability to sponsor more workers’ visas and indeed cancel the visas of those whom they are currently sponsoring.

Any employer (ie whether or not they hold a PBS Sponsor licence) who fails to carry out the checks correctly and are found to employ an illegal worker could face a large financial civil penalty of up to £20,000 per illegal worker hired. Conversely, if you carry out the right to work checks correctly, you will have a statutory excuse against a liability for a civil penalty. This means that if the Home Office find that you have employed someone who does not have the right to work, but you have correctly conducted document checks as required, you will not receive a civil penalty for that illegal worker.

In addition to civil penalties, employers who knowingly hire, or have reasonable cause to believe that they are hiring an illegal worker, whether they have completed the relevant checks or not, will have committed a criminal offence and could face up to five years imprisonment and/or an unlimited fine.

Closure Notices (where a business premises is closed for a specified time) and Compliance Orders (to ensure employers firm up their processes for the prevention of illegal working) are sanctions which can be imposed where illegal working is found and where an employer has previously failed to comply with illegal working legislation. Indeed, in “high risk” areas of the UK economy (private hire vehicles and taxi sector and the alcohol and late night refreshment sector), the Home Office has the power to suspend or revoke a business licence.

Working illegally is a criminal offence. Illegal workers face having their wages seized. They may also be prosecuted and can be imprisoned for up to six months.

What should I do next?

It is imperative to ensure that anyone involved in the hiring of staff within your business is aware of the duty to carry out right to work checks (and the consequences of failure to do so where illegal working is found) and how to carry these out correctly. Training should be offered where necessary. Template contracts/offer letters should also be reviewed to ensure that right to work provisions are contained therein.

Gemma Goodhead is head of immigration at SA Law.

Further reading on employee rights

Related Topics

Employment Law

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