Small to medium businesses employing international staff must act now to ensure they comply with UK immigration law – or risk a huge civil penalty.
In the latest example, a chip shop in Surrey has been fined £40,000, for being caught employing one worker who did not have the correct immigration permission. The owner of the chip shop believed his worker had the right to work based on documents shown to him by the worker This mistake has cost his business £40,0000.
The threat of huge consequences for getting immigration checks wrong has been present for many months, and this is another reminder that small business owners should be extremely sensitive to their potential vulnerability.
Immigration enforcement and raids
The UK Government’s Immigration White Paper, released in May, sets out a renewed commitment to tackling illegal working. It promises 1,000 new enforcement staff and increased use of eVisas and biometric technology to identify non-compliance. It also confirms a recent trend of cooperation between the Home Office and other Government bodies, primarily HMRC, to identify illegal working through tax and employment records.
The Home Office’s current focus is on so-called ‘high risk’ sectors, where they believe illegal working and abuse of the UK immigration system is most prevalent. An unfortunate side effect of this approach is that small and medium sized businesses bear the brunt of enforcement action by the Home Office.
Penalties for employing those without the correct immigration permission
The most important thing for employers to understand is that only British and Irish citizens have an automatic right to work in the UK. Everyone else must have a visa or other permission to live and work here, such as indefinite leave to remain (sometimes called permanent residence). Since the UK left the EU in December 2020, this includes EU citizens. Employers are required to check that any prospective employee has the right to work before their employment begins.
If the Home Office identifies that an employee does not have the right to work, they will issue a civil penalty to the employer, unless the employer can show that they carried out a valid right to work check. These penalties start at an eye-watering £45,000 per worker. In the first half of 2024, the Home Office issued civil penalties totalling £21.5m.
Severe consequences for oversights
A right to work check carried out in accordance with Home Office guidance provides a full defence against a fine, reducing the penalty to nil. A partial right to work check provides no defence and no reduction in fine.
While media and Government coverage of enforcement action tends to focus on the minority of unscrupulous employers who knowingly employ those without the right to work or neglect to carry out any form of right to work check, we are increasingly seeing action being taken against small employers who are acting in good faith but may have made mistakes with how checks were conducted.
We know that many small businesses find immigration law and compliance overwhelmingly complex and technical. For example, asylum seekers may have no right to work, a restricted right to work or an unrestricted right to work. This will depend on the individual’s specific circumstances, such as when they made their asylum claim and whether they held a visa before they sought asylum. However, although these individuals may have very different right to work statuses, the difference in the immigration documents they hold can be minor.
The paperwork and processes surrounding this issue are fiendishly complex, and it is easy for both employees and employers to make mistakes.
Case study
We recently advised a client whose employee had presented them with an Asylum Registration Card (the immigration document issued to asylum seekers) which stated ‘Work Permitted – Shortage Occ”. Our client was unaware that ‘Shortage Occ’ meant the worker could only work in a very limited set of jobs, which did not include the job they had offered him. Our client mistakenly believed that the individual had the right to work. He also held a national insurance number, which our client believed meant he was permitted to work in the UK. They had no idea that the right to work could be restricted to specific roles or of the very serious consequences which could arise as the result of making a mistake in this highly technical area of compliance.
The Home Office identified that our client’s employee was working illegally through PAYE records and issued our client with a fine of £40,000. This was reduced from £45,000 because our client cooperated with the Home Office’s investigation. However, no further reduction could be agreed despite our client having made an honest mistake.
SMEs treated the same as multinationals
Honest mistakes like this are a common reason for civil penalties. The challenge is particularly acute for SMEs. There is no leniency from the Home Office, nor does the system differentiate between small business and multinational corporations. The system makes no allowance for the disproportionate impact of a fine of this size on a smaller business.
We always advise that prevention is better than cure. SMEs should act now to protect themselves from the financial and reputational risks of a civil penalty. It is essential to have appropriate systems in place to meet the Home Office’s strict requirements for right to work checks on new employees, and to take immigration advice on any complex scenarios which arise with specific new recruits.
What to do next
With enforcement in the headlines and civil penalties at a record high, immigration compliance is a responsibility that SMEs simply cannot afford to overlook. Take action by reviewing your right to work procedures and consider whether specialist training, and/or an internal or external audit, may be a worthwhile investment to protect your business against the risk of a very large fine.
For expert Immigration advice contact us on 03330 430350.
