Immigration Act 2016: tightening up employer's liability on recruitment

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The Immigration Act 2016 introduces, amongst other matters, a number of changes to the employer's duty to prevent illegal working, some of which came into force on 12 July.

Criminal Liability for illegal working

Thorough identity checks when recruiting employees are essential. It is illegal to employ someone who:

  • has not been granted leave to enter or remain in the UK; or
  • has no right to work in the UK, or do the work the employer is offering; or
  • is working more hours than permitted under the conditions of their leave.

In 2014/15, 1,974 civil penalties were issued to employers who had employed illegal workers. The maximum penalty is now £20,000 per worker and so not insignificant. Employers have a potential defence if they can show they checked and retained copies of certain original documentation before employment commenced.

From 12 July, the separate criminal offence of employing someone illegally was extended. Previously the employer would commit an offence if it (or person responsible in the organisation) knew that the employee was illegally employed. The Immigration Act 2016 now changes this to where the employer/person responsible knows or has reasonable cause to believe that the worker is 'disqualified' from employment by reason of immigration status.  The maximum prison sentence for this offence also increased to five years (previously two years) on 12 July.

Having 'reasonable cause to believe' is potentially a much lower hurdle than 'knowing' and could put careless employers at risk. Whilst a 'suspicion' is unlikely to be enough in itself, employers will certainly no longer be able to turn a blind eye. If there are obvious discrepancies in the documents checked and the employer has not investigated further, the employer could be at risk. The Government believes this offence will be easier to prove. It has also updated the "Employer's guide on right to work checks".

Staff involved in recruitment processes should be advised of the changes, and employers should ensure procedures for pre-employment checks and record-keeping are up to date with current requirements. Further/refresher staff training may be advisable.

On 12 July the Act also introduced a new criminal offence of being an illegal worker. It is intended to cover all types of worker including the self-employed and apprentices. In England and Wales the offence carries an unlimited fine or custodial sentence of up to 6 months, and the worker's wages may be seized under the Proceeds of Crime Act 2002. Employers may need to consider reputational risks as well as dealing with employees who are charged or convicted.

As of 12 July immigration officers gained enhanced powers to search for documents (including in electronic format) in connection with a civil penalty and where they have reasonable grounds to believe the employer is in breach of their duty to prevent illegal working. They also gained additional powers of seizure under the Act in relation to criminal offences.

In addition, immigration officers have new powers to close the employer's premises, for up to 48 hours, where they are satisfied on reasonable grounds that the employer is engaging an illegal worker and the employer cannot provide evidence that the correct checks have been carried out, if the employer (or a person connected with the employer, such as a director, manager or partner) has either:

  • previously been convicted of employing an illegal migrant, or
  • had a civil penalty notice issued to them in the previous three years, or
  • not paid a civil penalty notice issue to them.

Further changes including the Immigration skills charge

Other changes introduced under the Act are:

  • a new Director of Labour Market Enforcement to oversee labour market regulators and provide a co-ordinated strategy for enforcement, tackling rogue businesses who exploit workers,
  • a requirement for customer-facing public sector staff to speak fluent English or Welsh, although it is not yet known when this will be implemented, and
  • an 'Immigration skills charge'.

The 'Immigration skills charge' is due to be implemented from April 2017 for employers sponsoring non-EEA nationals coming to the UK under a Tier 2 Visa. It is to be introduced at £1000 per employee per year (with a reduced rate for small/charitable organisations). There are exemptions for PhD level jobs, international students switching from Tier 4 to Tier 2 visas, and the Intra Company Transfer Graduate Trainee category. The skills charge could increase recruitment costs if an exemption doesn't apply, and may incentivise some employers to look to the resident labour market to keep costs down.

These changes were proposed and finalised well before the EU Referendum, which of course has cast further doubt and potentially increased costs on immigration from EU countries following the UK's exit from the EU. For a discussion on the position of EU nationals currently working in the UK and what it means for employers, please see our Immigration team's article. Of course, it is very difficult to predict what may happen as the free movement of workers will depend heavily on the trade deal reached. If access to the single market is retained, freedom of movement may be the price to be paid, but that would go entirely against the pledges of the 'Leave' campaign on which the Referendum was decided.