UK Businesses employing staff without the right to work face civil penalties of up to £20,000 per illegal employee. These can be imposed without proof of illegal working (or the employer’s awareness of it) – it is then up to the employer to demonstrate that the employee did have the right to work or that it carried out prescribed right to work checks to obtain a ‘statutory excuse’.  Guilty until proven innocent, one might say.  This civil penalty system has been in place since 29 February 2008 and supplements the criminal regime under which there have historically been very few prosecutions.

Since the introduction of the Immigration Act 2016 earlier this year, a range of measures have been implemented indicating the Government’s continuing drive to get tough on businesses that employ staff without the right to work, the most relevant of which are as follows:

• From 12 July 2016, the Act extended the existing criminal offence to cover an employer who has ‘reasonable cause to believe’ it is employing someone illegally (as opposed to its ‘knowingly’ doing so). Employers found guilty of this offence could receive an unlimited fine and/or a custodial sentence of up to 5 years for a director, manager or company secretary found to have consented to or connived in the offence. It is clear that the law has been changed to increase the chances of successful prosecution but we do not yet know how regularly or strictly it will be enforced. For example, will it apply to an employer who was personally unaware that his employee did not have the right to work but whose own records show the expiry of that employee’s right to work (or should do, had proper right to work checks been carried out)? Or will the sanction be reserved for the more serious cases of repeated illegal working where previous civil penalties have had no deterrent effect and the employer indicates a flagrant disregard for carrying out right to work checks? For most otherwise law-abiding employers, the imposition of a civil penalty alone is likely to be a sufficient shock to ensure that they put proper systems in place to prevent future breaches but it is too early to say where the Home Office will draw the line.

• From 1 December 2016, the Home Office also has the power to close premises for up to 48 hours where a Chief Immigration Officer has reasonable grounds to believe that a business is employing someone without the right to work in certain circumstances, including where the employer has already been issued with one or more civil penalties in the previous three years. The initial closure period can be followed by special compliance requirements as directed by the courts including continued closure for a defined longer period. In the limited guidance provided to date, the Home Office has said that the provisions are intended to ‘deal with those employers who continue to flout the law by employing illegal workers and evading sanctions’. Unlike a criminal prosecution, however, closure action does not require the Home Office to demonstrate the employer’s awareness of the illegal working. The closure of premises, even for a short period could have a far more devastating commercial and reputational impact for most employers than a civil penalty.

• Aside from these new provisions, businesses which employ and sponsor skilled staff from outside the EEA under a Tier 2 sponsor licence should also bear in mind that they are at risk of that licence being suspended, downgraded or revoked should they be issued with a civil penalty. Revocation of the sponsor licence would mean having to terminate the employment of all Tier 2 staff in the business and being prevented from sponsoring anyone else for at least a year. If an employee’s sponsorship is terminated, his leave to remain in the UK will be curtailed to 60 days during which he must find another willing sponsor to take him on (usually subject to first completing a prescribed resident labour market test) or leave the UK.