Changes to preventing illegal working from May 2014

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On 16 May 2014, important changes were introduced to the checks that need to be made before a person is employed. Employers need to ensure their recruitment practices have been updated.

Employers have a responsibility for ensuring that anyone they employ has the legal right to work in the UK and it is essential that robust recruitment processes are in place to reduce the risk of illegal working. Those involved in the recruitment process will need to be aware of significant changes that took effect on 16 May 2014.

The Immigration, Asylum and Nationality Act 2006 provides that an employer may be liable to pay a civil penalty for employing someone who does not have the right to undertake the work for which they are employed. In addition, a criminal offence will be committed if an employer knowingly employs an individual who does not have the right to undertake the work for which they are employed.

An employer may escape liability from paying a civil penalty if it can establish a “statutory excuse”. This means that it has complied with any prescribed requirements and checks before the employment begins.

On 16 May 2014 the maximum Civil Penalty increased to £20,000.

In 2008 a Code of Practice was published which included guidance on the factors to be taken into account when considering the amount of the civil penalty to be paid. The Home Office has now published a new Code of Practice on preventing illegal working and this replaces the 2008 Code.

The new Code applies where the person was employed on or after 29 February 2008 (the date the Act came into force) and the breach occurred on or after 16 May 2014, otherwise the 2008 Code applies. Some key points of the new Code are set out below:

  • For those employees with temporary permission to be in the UK, employers are not automatically required to conduct checks every 12 months following the initial right to work check. A follow-up check will be required when the employee’s permission to be in the UK and to work expires, as evidenced by the document, or combination of documents, produced for the right to work check. For certain documents the check will need to be made with the Employer Checking Service.
  • The range of documents that are acceptable for checking the right to work is reduced. The documents will still be set out under Lists 'A' and 'B' but shorter. A record of the date when the check was made will also need to be made to be able to rely on the statutory excuse (that the correct checks were made before employment started). 
  • In relation to students who have a restricted right to work, employers are required to obtain and retain a copy of evidence from a student’s education sponsor, setting out their term and vacation times covering the duration of their period of study in the UK for which they will be employed.
  • In the context of business transfers and the Transfer of Undertakings (Protection of Employment) Regulations 2006 there is an extension from 28 days to 60 days for conducting right to work checks for employees acquired as a result of a transfer.
  • There is a revised method for calculating the Civil Penalty levels. There is also now a payment by instalment option. The agreed period of time is usually up to 24 months but this can be extended to 36 months in exceptional circumstances. 
  • There is also the possibility of a reduction of the civil penalty amount for early payment, that is, the fast payment option. This reduces the amount of the civil penalty by 30% if payment is received in full within 21 days of the civil penalty notice.

The new Code sets out details of how the Civil Penalty is assessed and a number of factors will be taken into account. For instance, the level of the breach and whether or not the employer is committing an offence for the first time or whether it has employed illegal workers within the previous three years. Also relevant to determining the civil penalty will be any mitigating factors to be taken into account such as:

  • The employer reported suspected illegality.
  • The employer co-operated with the Home Office investigation.
  • Effective document-checking practices are in place.

The comprehensive Code includes a "consideration framework" and "penalty calculator" to explain how the different tariffs might arise and is available from the GovUK website.

Separate guidance is available on conducting right to work checks and details of the acceptable documents. 

Finally, a revised Code of Practice on avoiding discrimination when carrying out recruitment checks also took effect on 16 May 2014. This Code of Practice reminds employers to carry out right to work checks against all prospective employees (and not just those who appear to be from an ethnic minority or who have a foreign accent). This could be at a first or second interview stage; or at the shortlisting stage; or only for successful applicants – as long as all applicants are asked at that stage.  It also advises employers to have "clear written procedures for the recruitment and selection of all workers, based on equal and fair treatment for all applicants". The Code will have statutory effect and therefore can be taken into account by the Courts when determining liability.