Civil Penalties: what are they and how can they be avoided? (A guide for businesses)

Luna Williams
19th July 2018

This guide will help you through the process of dealing with a civil penalty applied against your business by the Home Office. They can apply a civil penalty to your business if they find your business employing an illegal worker without a statutory excuse.

There is a specific process that the Home Office take for businesses found employing illegal workers and it follows these steps:

Breach

Referral

Decision

Payment

Objection

Appeal

Enforcement

The order of these elements only shows the steps the Home Office may take; they do not correspond to the order in which they will take action. That is, some of the steps happen at the same time. This guide will go through each step and explain how Civil Penalties are usually issued and dealt with.

Receiving a Civil Penalty

The Home Office gives Civil Penalties to companies that disobey UK immigration law. This could either be by hiring a foreign worker for whom you do not have the authorisation, or by hiring a foreign worker in a position for a job that is different than initially detailed on the offer letter.

A company could also receive a Civil Penalty by mistake. While this is very rare, mistakes can happen. The Home Office can mistakenly send a Civil Penalty to the wrong company.

Keep in mind, the Home Office publishes a list each year of businesses which have received Civil Penalties. This means that the record of your business receiving a Civil Penalty is public and can cause harm to your business’ reputation.

If either of the two situations has happened to you, contact Immigration Advice Service and we will help you through the process. We will communicate your unique situation with the Home Office and work together with you to get your Civil Penalty dealt with.

Breach

If a breach has occurred, it means an employee has been suspected of working illegally. This may happen during a Home Office visit to your premises. If this happens, you are able to establish a statutory excuse for the worker and prove they are here legally with paperwork. For example:

A foreign employee of yours has been working for you for a number of months and the Home Office has asked you to prove that they are here legally. You can show the Home Office the current passport and work visa of the employee.

In this case, the current passport and work visa authorises you to employ the worker legally for the duration of the visa. If this is the case, the Home Office would write a No Action Notice, which means they will not take action against you and your case with the Home Office is closed.

If you are employing an illegal worker, and the Home Office finds out during an inspection but you don’t have valid paperwork to prove that the employee is here lawfully, they will issue you a Referral Notice. This means that the Home Office has referred your case to officials to consider what penalties to apply to your business for breaking immigration law.

Referral

Your Referral Notice will be sent to the Home Office, and also to the Civil Penalty Compliance Team. They will decide what level of penalty to apply to your business. They will also send you an Information Request where they will ask you to confirm details about your business. Information such as:

  • Your business’ details, if you are the employer.
  • The business details of the employer, if you are not.
  • If you have performed document checks on the workers referenced in the Referral Notice.
  • If you have reported suspicions about the right to work of any of your employees.
  • If you have any supporting documentation; if so, you must send it in.

There is a deadline to submit this information to the Home Office, which will be given on your referral notice (this is usually 28 days).

Make sure you respond to their request by this deadline!

Decision

The Home Office will assign a case worker to determine what civil penalty to apply. They consider the following questions in determining the penalty.

  1. Who is the employer?

This is an attempt to see whether the employer is liable for a civil penalty or a warning notice.

  1. What is the worker’s immigration status and employment start date?

This is to determine whether the rules in section 15 apply in this case.

  1. Has a breach of section 15 occurred?

This is to determine if the worker is found in employment for which they do not have permission.

  1. What is the penalty level and amount?

This is to figure out how many penalties to apply.

They will also use a guide to assist with answering question four that will determine whether the employee is a citizen of the Commonwealth and to determine their level of work authorisation.

Civil Penalty

If you are liable for a civil penalty, the Home Office will send you a Civil Penalty Notice with a specific fee posted. This amount will correspond to the answers of the previous four questions.

Be sure you read and understand the Civil Penalty Notice because it will detail the breach date, how much the Home Office require you to pay, the payment due date and the methods of payment.

Contact IAS if you are unsure about anything on the Civil Penalty Notice and we will help you.

Warning Notice

The Home Office will issue a Warning Notice if they have determined that you are not liable to pay a fine. The Warning Notice will take the form of a formal warning against your breach and expressing action the Home Office will take against you if another breach occurs. Also, it will detail how you can ensure compliance.

No Action Notice

The No Action Notice is detailed above. Please note the Home Office may issue a No Action Notice before or after the referral step.

Statement of Case

With every case, you will get a Statement of Case that explains the evidence and the conclusions made from that evidence. If the Home Office assessed a financial penalty, the Statement of Case will also explain why it is that specific amount.

Payment

You must pay the amount on the Civil Penalty Notice by the due date listed. This deadline will be 28 days from the date the notice arrives.

Failure to pay the penalty or make an objection may result in the Home Office taking action against you.

Standard Payment

The standard payment is due 28 days after the Home Office gives you the Civil Penalty Notice. The payment is detailed on the notice.

Fast Payment

The option for fast payment is available to some companies. Taking advantage of it may reduce your penalty payment by 30%. There are restrictions for fast payment:

First, you must make the payment in full within 21 days of it being due.

Second, you may not have been employing illegal workers in the past three years without statutory excuse.

You are not eligible for fast payment more than once.

Payment by installment

You can claim to be unable to pay the penalty in one lump sum and qualify for payment installments if the Home Office agrees that it would be a hardship.

You must make this claim within 28 days of the date your Civil Penalty Notice was given. You can make this claim by sending an email to
[email protected] requesting an installment plan or by writing to the Order to Cash Team at their address:

Order to Cash Team

Home Office Shared Service Centre

HO Box 5003
Newport

Gwent NP20 9BB

Telephone: 0845 010 0125

Objection

If you wish to object to a Civil Penalty Notice, you may do so, but you must make this objection within 28 days from the date on your Civil Penalty Notice.

Grounds to object a Civil Penalty Notice include:

  • You are not liable to pay the penalty.

In other words, you are not the employer of the employee concerned.

  • You have a statutory excuse.

That is, you have carried out document checks and can prove the employee is working legally.

  • You will be overly burdened by the amount of the penalty.

It can happen that the Home Office have miscalculated the amount of the penalty or you have specified how you will be unable to pay the fee.

The Home Office will consider your objection and make a ruling if you lodge an objection within the timeframe required and you have adequate grounds. After they have reached a decision, they will again notify you of the outcome. Any new notification will be accompanied by a Statement of Case explaining the reasoning behind the Home Office’s decision.

Appeal

The ability to appeal is reserved for the following situations:

  • Your objection has been determined and you have adequate grounds to reject it; or
  • You have not been informed of a decision on your objection within 28 days.

You must make your appeal within 28 days of the date given in your notice except if a longer time period has been agreed to.

Appeals are made in County Court in England, Wales and Northern Ireland. They are made in Sheriff Court in Scotland.

You may appeal on the same grounds as those on which you can make an objection. See the section on objection above.

Enforcement Action

If you don’t pay the penalty as it has been stated, set up an instalment payment plan or appeal the decision of the Home Office, the Home Office will take action to force your payment.

This could negatively affect you’re access to credit in the future and your ability to serve as the director of a company may be curtailed. Furthermore, it may affect your ability to hire foreign workers in the future or hold a sponsor licence, which is necessary to sponsor some foreign workers.

Do not let penalties from the Home Office go unattended to!

How to avoid civil penalties

The best way to avoid civil penalties is to ensure that you have adequate documentation proving the employee’s right to work in the UK. Make sure that you have legitimate copies of documents like passports, work visas, biometric residence cards, birth certificates or certificates of naturalisation are adequate proof of right of work. Remember that all documents should be current and explicitly state the person’s right to work in the UK.

Be honest and accurate about the details of the position you are extending to foreign workers. If it is accurate to the job you are giving to a foreign worker, then you are unlikely to receive a Civil Penalty.

Another way to avoid civil penalties is to be prompt in sending a statutory excuse to the Home Office. Promptness in responding to the Information Request will help you to avoid the Home Office increasing your penalty.

Promptness in objecting or appealing a decision the Home Office makes increases your chance of getting your penalty changed or reduced. Ensuring you understand and use the most fitting grounds for appeal will also increase your success.

Regarding payment, using the fast payment option can reduce the burden of payment. If it isn’t an option, remember that you only have 28 days to request a payment by installment plan.

How Immigration Advice Service can help

Immigration Advice Service has years of experience handling Civil Penalty cases. We take details from your unique situation and use them to provide you the best chance of success.

We have services which directly help with Civil Penalties. They are:

  • Immigration Consultancy;
  • Immigration Audit; and
  • Immigration Compliance Training.

Immigration Consultancy

If you have any questions about the immigration process and whether you are conducting it lawfully, contact us and we will work with you to make sure you are.

With our immigration consultancy, we will design a unique immigration plan for your business to follow so you’ll be up-to-date on current immigration law.

Immigration Audit

With our immigration audit, we go through your business practices, focussing especially on hiring and record retention. Should we find any inadequacies, we will bring them up and work with you to fix them. This way you are less likely to have the Home Office issue a Civil Penalty against you.

Immigration Compliance Training

If you need help bolstering your HR department’s practices, we will provide training on the most updated immigration policies.

It’s important that your business stays current on the changing laws of UK immigration.

You can contact us by phone at 0333 363 8577 or make an enquiry if you have received, or are worried about receiving a Civil Penalty.