Civil Penalties for Illegal Employment

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Understanding Civil Penalties

Employers may receive a civil penalty if they are found to be employing an individual who does not have the correct immigration permission to work in the UK. The Home Office applies strict sanctions in these circumstances, and penalties can be significant. In serious cases, criminal liability may also arise.

A correctly completed right to work check provides a statutory excuse, protecting the organisation from liability. Employers should ensure that checks are carried out consistently and in line with Home Office requirements.

What Is A Civil Penalty?

A civil penalty is a financial sanction that can be imposed under the prevention of illegal working legislation. Civil penalties are issued by the Home Office when they determine that an organisation is employing a person who does not have permission to work in the UK.

Employers can avoid liability for a civil penalty if the correct right to work checks were carried out before the individual commenced employment.

Referral Notice And Home Office Decision

If Home Office officials believe that the correct right to work checks were not carried out, the employer may be issued with a ‘Referral Notice’. This means the case will be passed to the Home Office for further consideration. The Home Office often issues an ‘Information Request’, whereby the employer is required to provide information and evidence relating to the relevant individual.

Following this process, the employer may receive one of the following:

Civil Penalty Notice.
Warning Notice.
No Action Notice.

A Civil Penalty Notice will be issued when the Home Office believes an employer is liable for a civil penalty for employing one or more individuals who do not have the right to work in the UK or who are working in breach of their conditions. The notice will set out:

Why a decision has been made.
The amount payable.
The deadline for payment.
How the employer can object to the notice.

The Amount Payable

The level of a civil penalty depends on several factors, including:

Whether the employer has previously been found to be employing workers illegally.
Whether the employer generally complies with their duties to prevent illegal working.
The circumstances of the employment.
Any mitigating factors that apply.

Penalties range from £45,000 for a first breach to £60,000 for repeat breaches, and may be reduced if mitigating factors apply.

Mitigating Factors

If the employer has not carried out a right to work check in accordance with Home Office guidance, and is therefore liable for a civil penalty, the Home Office will assess whether any mitigating factors apply. These include:

Reports: If the employer has reported suspicions about an employee’s right to work to the Home Office, the penalty may be reduced by £5,000.
Cooperation: If the employer has actively cooperated with the Home Office throughout the investigation, this may reduce the penalty by a further £5,000.
Effective right to work processes: If the employer can demonstrate that they have effective document-checking practices in place, have reported suspicions, and have cooperated fully, this mitigating factor may reduce the ‘Civil Penalty Notice’ to a ‘Warning Notice’, meaning no payment will be due.

Objecting To A Civil Penalty

Employers can object to a civil penalty if they believe:

They are not liable to pay the penalty.
A statutory excuse exists.
The penalty amount is too high.

An objection must be submitted within the timeframe set out in the notice, which is usually 28 days.

The employer will then receive an Objection Outcome Notice confirming whether the penalty is cancelled, reduced or maintained.

If an objection is unsuccessful, employers may be able to appeal the penalty to the County Court. Appeals must be supported by evidence and submitted within the required timeframe.

How Our Immigration Partners Can Help

We provide guidance on civil penalties, right to work checks and compliance processes. If you have received a civil penalty notice or would like to discuss your organisation’s compliance procedures, please contact us or complete our enquiry form below.