Civil penalty
Civil penalty is a fine of up to £60,000 per each illegal worker if an organisation is found employing illegal worker(s). Civil penalties are issued by the Home Office after discovering that an employer is employing a migrant who does not have permission to work in the UK or who works in breach of his visa conditions. The civil penalty definition is in section 15 of the Immigration, Asylum and Nationality Act 2006.
Home Office enforcement actions and illegal working.
Procedures on civil penalties are set out in the laws including codes.
Home Office 2024 Code of Practice on Preventing Illegal Working.
It is crucial for employers to follow the Right to Work Checks guidance published by Home Office. Unfortunately many employers have no or limited understanding how to carry out the right to work check and wrongly believe that having a UK driving licence and/or National Insurance number (NI) is equivalent to having right to work in the UK.
If you employ workers illegally, you may face the following penalties
If you employ workers illegally, you may face the following penalties:
- civil penalty of up to £60,000 per illegal worker.
- in serious cases, a criminal conviction carrying a prison sentence of up to five years and
an unlimited fine. - closure of the business and a compliance order issued by the court.
- disqualification as a director.
- not being able to sponsor migrants.
- seizure of earnings made as a result of illegal working.
- review and possible revocation of a licence in the alcohol and late-night refreshment
sector and the private hire vehicle and taxi sector.
What employers should do to avoid civil penalty
Employers can avoid the liability if they carried out the correct right to work checks before the migrant started employment with them and subsequently carry out the correct follow up check for migrants with time limited immigration permission. If the Home Office take the view that the correct right to work checks were not carried out, the employer may be issued with a ‘Referral Notice’ and their case will be sent for further consideration by the Home Office.
Questions to be determined by the Home Office
Questions to be determined by the Home Office:
- Who is the employer? The party potentially liable for a Civil Penalty or Warning Notice.
- What is the worker’s immigration status and employment start date? Whether the worker had permission to work and do the work in question and when the employment commenced.
- Has a breach occurred? Whether the worker has been found in employment contrary to the law by working when they do not have permission, or working in breach of their conditions.
- What is the penalty level and amount? Whether the formal response to the employer will be a Civil Penalty Notice for a specified amount, a Warning Notice or a No Action Notice.
Civil penalty investigation and notices
Following the investigation, the employer may receive one of the following notices:
- a Civil Penalty Notice – If you are liable for a civil penalty for employing one or more of the illegal workers who were identified on your Referral Notice, we will give you a Civil Penalty Notice for a specified amount.
- a Warning Notice – Your Warning Notice will inform you why you are not liable for a financial penalty on this occasion and for which illegal workers. It will state that this notice is a formal warning, that it will be taken into account if you breach the Act again, and how to ensure you comply in future.
- a No Action Notice – If you are not liable for a civil penalty because, for example, you have established a statutory excuse for the identified workers, you will be issued with a No Action Notice. Unlike the Warning Notice, this No Action Notice will not be taken into account if you are found employing illegal workers in future.
A Civil Penalty Notice will be issued when the Home Office takes the view that 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 visa conditions. The Civil Penalty Notice will state how much the employer would need to pay and the date by which it must be paid. It will also state how the employer can object to the Civil Penalty Notice.
The amount of civil penalty will depend on various factors such as whether the employer has been found to be employing workers illegally in the past and whether the employer generally complies with their duties to prevent illegal working. The Home Office apply a sliding scale that takes into account the employer’s compliance record as well as any mitigating factors.
Mitigating factors
What are the mitigating factors for employers who face civil penalty:
- Whether employer have been found to be employing illegal workers within the previous three years.
- Whether there are any mitigating factors:
If the employer has not carried out a right to work check in accordance with the Home Office’s guidance, the Home Office will assess whether there are mitigating factors before confirming the penalty:
- Evidence of reporting suspected illegal workers (e.g. To qualify for this reduction you must have reported your suspicion about them to Home Office Sponsorship and Employers’ Helpline)
- Evidence of active cooperation with Home Office (e.g. responding promptly, honestly and accurately to questions asked during Immigration Enforcement visits and responding to any further requests for information by the deadline set);
- Evidence of effective right to work checking practices together with mitigation for factors 1 and 2 listed above (this can only be applied when employer has not been found employing illegal workers within the previous three years.
Objection and Appeal from civil penalty
When civil penalty notice is received employers can object to the Home Office or appeal to a County Court. There is 28 days from the date given in your notice to do so. An objection against a penalty needs to normally be submitted before appealing. Objection Form needs to be completed, where specific grounds need to be stated and supporting evidence needs to be enclosed.
If the employer receives a Civil Penalty Notice from the Home Office, they can object in writing within 28 days of the due date specified in the notice. Details of the reason for objecting must be supplied along with evidence supporting one or more of the acceptable grounds for objection as set out on the Objection Form. An employer may object on one or more of the following grounds:
- they are not liable to pay the penalty (for example, because they are not the employer of the illegal worker(s) identified);
- they have a statutory excuse (this means they undertook a prescribed right to work check); or
- the level of penalty is too high (this means the Home Office have calculated the penalty incorrectly or the employer has evidence that they have met specified mitigating criteria which has not been taken into account).
The Home Office will send an Objection Outcome Notice if the penalty is to be cancelled, reduced, or maintained.
Appeal to court to challenge civil penalty
When an employer’s objection against a civil penalty has determined they remain liable for a civil penalty, the employer may then appeal to the County Court (England, Wales and Northern Ireland) or the Sheriff Court (Scotland only) if they are not satisfied with the decision. The
employer must appeal to the Courts within 28 days of either the date specified on the Objection Outcome Notice, or the date specified on the new Civil Penalty Notice. The deadline for appeal will be specified on the new notice. If the employer does not receive a response from the Home Office to their objection within the 28-day period, an appeal must be brought within 28 days beginning with the date by which theHome Office should have replied.
You may object on the grounds that:
- you are not liable to pay the penalty (this could mean you are not the employer of the illegal worker(s) identified);
- you have a statutory excuse (this means you carried out document checks as required); and/ or
- the level of penalty is too high (this means we have miscalculated the amount of your penalty by reference to the wrong scale, or you have evidence that you have met specified mitigating criteria which we have not taken into account).
In response to a civil penalty objection an employer may receive:
- A Warning Notice
- A new Civil Penalty Notice (where the penalty is increased)
- An Objection Outcome Notice (Penalty maintained)
- An Objection Outcome Notice (Penalty reduced)
- An Objection Outcome Notice (Penalty cancelled)
If the civil penalty is maintained an employer has the option to bring an appeal to the County Court within 28 days of the decision.
Enforcement is stipulated in section 18 of the Immigration, Asylum and Nationality Act 2006. In England and Wales the penalty is recoverable as if it were payable under an order of the county court.
You may appeal on the grounds that:
- you are not liable to pay the penalty (this could mean you are not the employer of the illegal worker(s) identified);
- you have a statutory excuse (this means you carried out document checks as required); and/ or
- the level of penalty is too high.
What employers should do to avoid civil penalty
What employers should do is to review their right to work checks processes and procedures to ensure that they are in line with Home Office guidance and adhered to in practice.
When employer is already subject to checks they are likely to need a lawyer to guide them through the steps.