Business immigration series: 3 - civil penalty notices

Business immigration series: 3 - civil penalty notices


Author: Katie Marsden

Applies to: UK wide

This article looks at the consequences of employing illegal workers.

The makeup of the UK's workforce has never been as ethnically diverse as it is today. While this is good news for many UK employers, businesses need to be increasingly mindful that it is illegal to employ anyone who doesn't have the right to work in the UK.

As awareness of the problem of illegal working continues to gain momentum, so do the measures designed to tackle it. Employers who fail in their obligations are potentially liable for civil penalties of up to £20,000 for each worker employed illegally and, in the most extreme cases, criminal liability carrying a sanction of up to five years' imprisonment and/or an unlimited fine.

Businesses are therefore walking a difficult line between making sure they employ people who are eligible to work in the UK, while also attempting to avoid discriminating against individuals on the basis of their race or nationality.

This article looks at the potential civil and criminal sanctions that employers can face if found to be employing illegal workers.

Criminal and civil sanctions

An employer who is found to be employing someone who they knew or had 'reasonable cause to believe' didn't have the right to work in the UK can face a five-year prison sentence and/or pay an unlimited fine. This includes where the employer had any reasons to believe that:

  • the individual didn't have leave (permission) to enter or remain in the UK;
  • their leave had expired;
  • they weren't allowed to do certain types of work;
  • their papers were incorrect or false.

Employers can also be penalised by way of a civil penalty notice if they employ someone who doesn't have the right to work in the UK and they did not carry out the correct checks or failed to do so properly. (see Business immigration series: 1 - Right to work checks). In such cases, the employer might get a 'referral notice' to let them know the case is being considered and they may face a potential fine of up to £20,000 for each illegal worker. If found liable, employers have 28 days to respond to the civil penalty notice and can either accept and pay the penalty or challenge it.

The government encourages employers to accept by offering payment plans and a 30% discount for those who pay their full fine within 21 days. For those who decide to challenge the notice, there are five potential outcomes: the penalty could be cancelled, reduced, maintained, increased or the employer could be issued a warning with no penalty. Of course, whether an employer decides to challenge the notice will depend on the evidence available to support their case as the risk of the penalty being increased serves as a powerful deterrent for many employers. As such, employers should seek legal advice regarding the potential outcome of challenge.

Where a challenge is made to the Home Office, it is important that as much information as possible is included to support the employers' case. Employers should make it clear to the Home Office on what basis the challenge is being made e.g. is it because they are not liable for the penalty as they are not the employer of the worker in question? Do they have a statutory excuse in that they can prove they carried out relevant document checks before the worker commenced employment? Or, is the level of penalty too high as there are mitigating circumstances which should reduce the penalty?

If an employer is not successful in challenging the notice they can appeal the outcome as a final resort. Again, the appeal must take place within 28 days of the Home Office's decision.

Unfortunately for employers, the government's 'no nonsense' approach in line with the current political agenda means that there is an increase in civil penalty notices being served on employers. The civil penalty regime applies to all businesses, big and small, targeting those who ignore their obligations as well as those who don't intend to break the rules. Employer details may also be published by Immigration Enforcement as a warning to other businesses not to employ illegal workers.

The most recent Home Office quarterly report on this matter covers the period between 1 October 2016 and 31 December 2016. That report shows that, during that period, 703 civil penalties were issued to employers, with 974 illegal workers discovered. The gross value of penalties issued by the Home office during that period was £11,595,000.00.

The numbers show that the government is continuing to target businesses that fail to comply with the strict rules and who are not carrying out the appropriate 'right to work' checks.

Any employer who recruits someone from outside the UK should ensure that person has a right to work in the UK. The employer should then diarise and carry out regular 'right to work' checks on any such worker as long as they are in the job. Just as importantly, employers also need to report any employee that disappears, or any suspicions they might have, immediately to the Home Office. Employers' reporting obligations will be discussed in further detail in a future article.

Best practice guidance

Employers, if they haven't done so already, should consider putting in place specific policies or procedures to ensure that they are carrying out the appropriate checks to prevent illegal working.

The essential steps that employers need to consider are:

  • obtaining each employee's original identity documents;
  • checking that those documents are valid in the presence of the employee;
  • copying those documents and storing them securely;
  • recording the dates of every check carried out.

The Home Office has provided a useful checklist for employers, including the various kinds of identity documents which are acceptable:

Coming up.

Keep your eye out for our upcoming articles on employing non-EEA workers and record keeping.


This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.

About the Author

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Katie Marsden


03700 86 5808

Katie joined Shoosmiths as a Solicitor in October 2014. She advises on all areas of employment law, negotiating settlement agreements for employees and employers, dealing with tribunal claims and advising employers on HR issues such as disciplinaries and grievances and drafting of employment contracts and handbooks.

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