Immigration Enforcement data reveals that almost 1,000 civil penalties were issued in 2022, costing employers a total value of £16million. Since then, the Home Office has announced plans to focus its attention on illegal working. We have been seeing substantially increased activity in this area in recent months.

In this article, we explain what the immediate next steps are for employers in receipt of an Information Request regarding a suspected illegal worker.

The civil penalty system

A civil penalty is a financial sanction of up to £20,000, issued by the Home Office to employers found to have failed to complete a compliant right to work check under the prevention of illegal working regime. The penalty is issued per illegal worker. Employers should be aware of the Home Office’s code of practice, which is considered by the Home Office when determining the amount of civil penalty for employing an illegal worker.

The consequences of being issued with a civil penalty can be far-reaching. If the employer is a sponsor licence holder employing overseas workers, they are at an increased risk of losing the licence. Those sponsored under the licence will have their leave shortened and must either submit a fresh visa application or leave the UK. The Home Office publishes reports on the recipients of civil penalties so what’s arguably worse is the negative press coverage that often follows, along with reputational damage and a hit on profits. An employer can also be at risk of potential criminal prosecution if they know, or have reasonable cause to believe that they are employing an illegal worker.

There are a number of stages to the civil penalty process, which the Home Office detail in an Employer’s guide to the administration of the civil penalty scheme. An Information Request is the precursor to a civil penalty. It should be seen as an opportunity for an employer to respond to the allegation and submit documentation in its defence.

What is included in an Information Request?

An Information Request provides an employer key information and deadlines. This helps employers determine who is impacted and how much time there is to collate evidence and respond.

The Information Request will ask the employer to confirm:

• The organisation’s details including whether it’s a sole trader or limited company, its trading and registered name and address, business owner or company director details etc.
• Alternative business details if the recipient is not the actual employer.
• The names of the suspected illegal worker(s) and their dates of birth.
• That right to work checks were completed and when these took place.
• If there are any reports made the employer if they suspected illegal working.
• If there is any supporting documentary evidence.

It will also confirm the date the alleged breach came to the attention of Immigration Enforcement and that evidence is being considered to confirm whether or not to issue the civil penalty and if so, for what amount.

What immediate steps should an employer take on receipt of an Information Request?

Seek legal advice
Although the Information Request contains instructions on how to respond, this is an opportunity to submit grounds to object and detail any mitigating factors, if applicable. Seeking legal advice from a specialist immigration practitioner may assist to ensure the request is dealt with in line with the Home Office’s guidance, and that any representations are put forward in the most effective way.

Promptly and accurately cooperate with the Home Office
An employer who actively cooperates with the Home Office, but who is later issued with a civil penalty, may have the amount reduced by £5,000. Active cooperation means promptly and accurately responding to questions and the Information Request by the deadline, disclosing any evidence, providing access to premises as well as recruitment and employment records. Employers should also be prepared to provide access to right to work processes and systems and be available during the investigation.

Check the right to work evidence
An immigration practitioner can help to assess whether a compliant right to work check was completed before employment commenced, and whether follow-up checks were also completed compliantly if relevant. They can also establish the legal basis for the employment such as the worker’s nationality and if they have been complying with their visa conditions, if relevant. If the employee does have the right to work, liability for a civil penalty is not established.
The illegal working regime contains safeguards that can protect employers and it may be the case that an employer has a statutory excuse against a civil penalty. Even if an employer discovers that they have been misled by an employee who actually does not have the right to work in the UK, they can retain the statutory excuse if they can demonstrate right to work check compliance.

Establish whether there is an employer-employee relationship
Illegal working legislation only covers individuals employed under a contract of service or apprenticeship. If the relationship falls outside of this, for example if the ‘employee’ is actually a self-employed contractor or an employee of an employment agency, then evidence of the correct relationship should be submitted. Note that determining employment status can sometimes be a vexed question as a matter of employment law, with the lines between contractors and workers/employees sometimes seeming quite blurred.

Consider speaking to the individual
The employer should take legal advice on whether it is appropriate to consider speaking to the individual to discuss their right to work documentation. The person may have another nationality or another document that they can provide to establish their right to work. Keep records of those conversations. The employer should give careful thought about how it handles these conversations, to minimise the risk of employment tribunal claims.

Submit an Employer Checking Service request
Depending on the circumstances, an employer may wish to complete an Employer Checking Service request. The employee must be informed before making the request. A ‘positive’ result will give the employer a fresh statutory excuse against illegal working. Be on alert that the request could return a ‘negative’ result, in which case steps should be taken to consider whether it is appropriate to cease employment until the issue is resolved. It is important to note that a ‘negative’ result does not necessarily mean that the employee does not have the right to work.
Legal advice should be sought before the employer makes any decision to terminate or suspend employment. Our view is that suspending the employee is, generally, unlikely to mark the end of the employer’s liability period, because they will continue to be an employee (even if they are not being paid). Obtaining up-front employment law advice would also help to guide the employer through a fair investigation and potential dismissal process, to mitigate the risk of employment tribunal claims for discrimination or unfair dismissal.

Up-front preparation can lead to the best outcome

The Home Office will consider the evidence. If there is clear evidence of illegal working, this will result in the issuance of a civil penalty. If the employer cooperates with the Home Office, the amount of the penalty may be reduced by £5,000. If the employer can establish that there is no potential liability, a ‘No Action Notice’ will be issued and the case closed.
If you have questions about illegal working or carrying out compliant right to work checks more generally, please get in touch with a member of our Immigration Team.