Civil Penalty for Illegal Employment: Guide for Employers

What is a Civil Penalty?

Under Section 15 of the Immigration, Asylum and Nationality Act 2006, all employers in the UK are legally obligated to ensure that all of their employees are able to work legally in the UK by carrying out Right to Work Checks. As well as this, all UK employers who wish to hire overseas workers must hold a relevant Sponsor Licence.

If you are employing illegal workers, hiring foreign workers without a Sponsor Licence or you allow your overseas workers to work without a valid UK visa, then you could receive a Civil Penalty notice issued under UK immigration law.

This penalty comes directly from the Home Office and comes in the form of a written warning and a monetary fine. If you receive a UK Civil Penalty, it must be quickly responded to in order to avoid further penalties.

What are the penalties for employing illegal workers?

The amount of Civil Penalty an employer will be issued with depends on a number of factors, including whether the employer has been found to be employing illegal workers previously, how many illegal workers they are employing and whether they generally comply with their duties to prevent illegal working.

If a business is found to be in breach of their immigration duties, the Home Office could issue them with a civil penalty of up to £20,000 for each breach or illegal worker they employ. There are no limits on how many civil penalties the Home Office could issue to an individual business.

Generally, if it is the first time in a three year period in which the employer is found to have hired illegal workers then a civil penalty of £15,000 per unlawful worker will be issued. If the employer is found to hive hired illegal workers for the second time within a three year period they will usually be served with the highest civil penalty of £20,000 per illegal worker.

The Home Office will also take into account any mitigating factors and the penalty could be reduced if any of these apply.

Process of 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.

Investigation

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.

2. 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.

3. 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.

4. 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.

Receiving a Civil Penalty Notice

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 of Civil Penalty

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

The impacts of a Civil Penalty

As well as having to pay a large fine to the Home Office, a Civil Penalty can also result in other significant consequences, particularly if the Home Office finds that you knowingly employed illegal workers. These consequences include:

• The suspension of your Sponsor Licence
• An adverse impact on your future credit
• Being disqualified from your role if you are a company director
• criminal prosecution (including imprisonment) and an unlimited fine

The Home Office publish an annual list of all the names of UK businesses who have been issued with Civil Penalties. This can also have a negative impact for businesses, as it can result in:

• Poor press coverage
• A loss of reputation and appeal
• A decrease in profits/business.

How to respond to a Civil Penalty notice?

When it comes to responding to a Civil Penalty notice an employer has two options, they can either accept the Civil Penalty or they can object to it.

If you choose to accept a Civil Penalty for illegal employment then you can arrange a payment plan with the Home Office. If the Home Office receives the full payment within 21 days then they will reward you with a 30% discount on the penalty.

If you choose to object to the civil penalty it is worth noting that this could result in the Home Office deciding to increase the penalty. For example, if the penalty has been reduced to due the mitigating factor of co-operation with the Home Office, they may decide that by objecting to the penalty you are no long co-operating and could increase it again.

If you object the penalty, the same people who issued the penalty will review it and they are unlikely to change their mind. This may make an objection seem pointless, however it is a necessary step if you wish to appeal the civil penalty.

Can you appeal a civil penalty issued under UK immigration law?

You can only appeal civil penalty notices to the county court if you have first objected to the penalty, you must do this by completing an objection form and filing it with the Home Office within 28 days of receiving the penalty.

In response to your objection the Home Office will respond with one of the following:

• Increasing the penalty
• A Warning Notice
• A reduction of your penalty
• Notification that your penalty has been cancelled
• An notification that your civil penalty has been maintained and why

If you have received your response and you are still not happy then you can appeal the civil penalty to the county court and you must do this within 28 days of receiving your objection decision.

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 instalment plan.

How can IAS help?

As there is a very strict deadline within which you are able to object to or appeal your civil penalty, it is highly advisable that you seek the assistance of an immigration adviser.

At IAS, we have a team of expert lawyers who are dedicated to making sure that you are aware of your options. One of our advisers will:

• Talk you through your rights and the correct approach to take objecting a penalty from the Home Office
• Liaise with the Home Office to find out the details of your alleged offence
• Assess your right of appeal and advice whether you are able to establish a statutory excuse to defend yourself against a civil penalty or to reduce it
• Prepare a Letter of Representation, which provides details about your case and any relevant immigration laws; and
• Act as your legal representative if your appeal is taken to a Tribunal hearing.

We will assist you throughout the entire duration of your objection, ensuring that you have the full support you need. Make an enquiry online or call +44 (0)333 414 9244 to speak with an immigration advice lawyer today.