The Home Office has released a draft Code of Practice on illegal working in the UK to specify the factors to be considered by the Home Office in determining the amount of the civil penalty for employing an illegal worker. It will come into effect from 16 May 2014.
Employers have a responsibility to prevent illegal working in the UK by ensuring their employees have the right to work in the UK.
The civil penalty scheme is designed to encourage employers to comply with their duty to prevent illegal working by carrying out document checks. It also means that an employer will not face a criminal sanction if they have failed to act with due care and diligence in doing so. The civil penalties imposed are intended to be proportionate. Separate guidance for employers sets out how to conduct right to work checks and how the Home Office administers the civil penalty scheme. It is important to note that there remains a criminal sanction for use against employers that knowingly employ illegal workers. This new Code does not cover the criminal offence of knowingly employing an illegal worker.
The Code of Practice provides details on the following changes:
- In respect of employees with temporary permission to be in the UK and do the work in question, employers are not automatically required to conduct checks every 12 months following the initial right to work check in order to retain their “statutory excuse”. A follow-up check will instead be required when the employee’s permission to be in the UK and do the work in question expires, as evidenced by the document(s) produced for the right to work check (see below);
- Reduce the range of documents that are acceptable for checking the right to work (see below);
- In respect of students who have a restricted right to work, employers will be required to obtain and retain a copy of evidence from a student’s education sponsor, setting out their term and vacation times for the duration of their period of study in the UK for which they will be employed;
- An extension of the grace period to 60 days for conducting right to work checks for employees acquired as a result of the Transfer of Undertakings (Protection of Employment) Regulations. No such grace period will be given for follow-up checks to retain the statutory excuse;
- A revised method for calculating civil penalty levels and paying these – for now it is prudent to note that the maximum civil penalty is £15,000 per illegal worker if the employer has not been found to be employing illegal workers within the previous three years.
If an employer is found employing an illegal worker, the Home Office may issue a notice informing the employer that the details of the case are being referred to officials with responsibility for administering the civil penalty scheme, to consider the employer’s liability for a civil penalty. There are 3 stages:
- Stage 1: the Home Office will determine if an employer has a statutory excuse against liability for a civil penalty. An employer will have a statutory excuse if they have correctly carried out the prescribed right to work checks using acceptable documents before employment commences;
- Stage 2: if the Home Office considers that the employer has not established a statutory excuse for an illegal worker, the Home Office will consider the level of the civil penalty;
- Stage 3: the Home Office will assess whether any of the published mitigating factors apply in the case when determining the amount of the penalty.
Acceptable documents for right to work checks and follow-up checks
Employers in the UK must check certain documentation before they employ an individual in the UK. The draft Code has now simplified these documents making it easier for employers to ensure that they have the correct documents on file. The documents that are considered acceptable for demonstrating the right to work in the UK are set out in List A and List B. An employer needs to understand these documents.
List A documents are for those individuals who have a permanent right to work in the UK such as UK citizens, EU citizens and those who have indefinite leave to remain amongst other immigration categories. If an employer follows the prescribed right to work checks, they will establish a continuous statutory excuse for the duration of the person’s employment with them. An employer does not need to repeat the right to work check.
List B documents are for those individuals who have a temporary right to work in the UK such as Tier 1, Tier 2 and Tier 5 migrants, amongst others. These documents are split further into two groups – Group 1 and Group 2. If an employer follows the prescribed right to work checks, they will establish a time limited statutory excuse in line with what type of document is acceptable.
Group 1 documents – the statutory excuse lasts until the expiry date of the individual’s permission to remain in the UK. However, if at the point of expiry the employer is satisfied that an extension application or an application to vary their immigration status has been submitted, the statutory excuse will continue for a further 28 days after the expiry date of the visa. During this period, employers must contact the Employer Checking Service and receive a Positive Verification Notice (PVN). If they do, the statutory excuse will last for a further 6 months from the date specified in the PVN. A further check will need to be made upon expiry of that period.
Group 2 documents – the statutory excuse lasts for 6 months only. In order to retain the statutory excuse, the employer must undertake a follow-up right to work check. This will involve the employer contacting the Employer Checking Service and receiving a PVN response. The statutory excuse will last for a further 6 months from the date of the PVN. A further check will be needed upon its expiry.
Overall, the responsibility placed on employers is onerous regarding right to work checks. However, with the correct advice and guidance (ask us!), an employer and their business will have the correct processes and procedures in place to ensure they meet these new requirements for their business. And then an employer can sleep more easily at night!