Trusted Civil Penalty Solicitors – Protecting UK Employers Facing Illegal Working Penalties

Civil Penalty

A civil penalty for illegal working can have serious financial, regulatory and reputational consequences for a UK employer.

The Home Office can issue a civil penalty where an employer is found to have employed an individual who does not have the right to work in the UK, or who is working in breach of the conditions attached to their immigration permission, and the employer cannot establish the required statutory excuse.

Current Home Office guidance provides for penalties of up to:

• £45,000 per illegal worker for a first breach; and
• £60,000 per illegal worker for a repeat breach.

For employers with more than one affected worker, the potential liability can therefore become very substantial.

The consequences can extend beyond the financial penalty. The Home Office may publish details of businesses penalised for illegal working, and serious compliance failures can also affect an employer’s Sponsor Licence. In the most serious cases, knowingly employing someone without the right to work, or having reasonable cause to believe they are working illegally, can potentially result in criminal liability.

A Civil Penalty Notice should therefore be reviewed carefully before payment or acceptance.

At Knights & Shah Solicitors, we advise employers on illegal-working civil penalties, including reviewing Home Office allegations, assessing whether a statutory excuse exists, preparing objections, advising on appeals and helping businesses strengthen their Right to Work and Sponsor Licence compliance.

What Is an Illegal Working Civil Penalty?

The civil penalty scheme forms part of the Home Office’s system for preventing illegal working.

Under section 15 of the Immigration, Asylum and Nationality Act 2006, an employer may be liable where it employs an individual who:

• does not have valid permission to be in the UK;
• does not have permission to work; or
• is undertaking work that their immigration permission does not allow.

The system is intended to encourage employers to carry out prescribed Right to Work checks before employment begins and, where required, repeat those checks for workers whose permission is time limited.

An employer may avoid liability where it can establish a valid statutory excuse.

This makes the quality and timing of the original Right to Work check particularly important when responding to a civil penalty.

What Is a Statutory Excuse?

A statutory excuse is the legal protection available to an employer that has correctly carried out the prescribed Right to Work check.

If the employer establishes a statutory excuse, it can avoid liability for a civil penalty even if the individual is later discovered to have been working illegally.

Depending upon the worker’s circumstances, the appropriate check may involve:

• the Home Office online Right to Work service;
• an acceptable manual document check;
• an eligible digital identity verification process; or
• verification through the Employer Checking Service.

Where immigration permission is time limited, the employer may also need to conduct the appropriate follow-up check in order to retain its statutory excuse.

The existence of some paperwork is not necessarily enough.

The employer must normally demonstrate that the prescribed process was followed correctly.

How Does a Civil Penalty Case Begin?

Where Immigration Enforcement identifies suspected illegal working, the employer may first receive a Referral Notice informing it that the case is being considered.

If the Home Office ultimately concludes that the employer is liable, it can issue a Civil Penalty Notice.

The notice should set out matters including:

• the worker or workers concerned;
• the alleged illegal working;
• the amount of the penalty;
• how the penalty has been calculated;
• how payment can be made; and
• how the employer can object to the decision.

Once a Civil Penalty Notice is issued, the employer has 28 days to respond.

That period should be used to review the evidence and establish whether there are grounds to challenge liability or the amount imposed.

How Much Can the Home Office Fine an Employer?

The current maximum civil penalties are:

First Breach

Up to £45,000 for each illegal worker.

Repeat Breach

Up to £60,000 for each illegal worker.

A repeat breach is determined under the Home Office penalty framework and can result in substantially greater exposure.

For example, if several workers are alleged to have been employed illegally, the total penalty can quickly become financially significant.

Employers should therefore avoid treating the headline amount in the notice as necessarily inevitable.

The Home Office applies its civil penalty framework to determine liability and the amount, and the employer may have grounds to challenge either or both.

Why Are Civil Penalties Issued?

Civil penalties commonly arise where the Home Office considers that:

• no Right to Work check was conducted;
• the check was conducted incorrectly;
• the check took place after employment started;
• an inappropriate document was relied upon;
• the employer failed to complete an online check properly;
• a worker’s immigration permission had expired;
• an essential follow-up check was missed;
• employment breached restrictions attached to the worker’s status; or
• the employer cannot produce evidence establishing the statutory excuse.

Cases can also arise where the employer believed that another organisation, adviser or recruitment agency had carried out the necessary check.

The Home Office guidance makes clear that responsibility ultimately remains with the employer. Except for specified use of Identity Service Providers for eligible British and Irish citizens, an employer cannot ordinarily establish a statutory excuse by relying upon a third party to perform the prescribed check.

Right to Work Checks and Civil Penalties

The central issue in many civil penalty cases is whether the employer completed the correct Right to Work check.

A compliant process may require the employer to establish:

• the identity of the worker;
• that the evidence relates to the individual;
• that permission to work exists;
• that the proposed employment is permitted;
• whether restrictions apply;
• whether the permission is permanent or time limited; and
• when a further check will be required.

An employer should also retain the evidence required by the Home Office.

A common problem is that a check was apparently undertaken but cannot now be proved because records were not retained properly.

Another common issue is reliance on an employee’s screenshot or copy of digital status instead of completing the prescribed employer-facing online check.

Time-Limited Right to Work and Follow-Up Checks

Some workers have a permanent Right to Work.

Others have permission that expires.

Where the initial statutory excuse is time limited, the employer may need to carry out an appropriate follow-up check before that protection expires.

Employers should therefore maintain systems recording:

• immigration expiry dates;
• when initial checks were completed;
• when follow-up checks are required;
• whether a further immigration application has been made; and
• whether Employer Checking Service verification is needed.

An employee whose visa document has expired does not necessarily have no Right to Work.

For example, lawful rights may continue in certain circumstances where an in-time immigration application, appeal or Administrative Review remains pending.

The immigration position should therefore be established before an employer concludes that a worker is employed illegally.

Employer Checking Service and Positive Verification Notices

The Employer Checking Service (ECS) can be particularly important where an employee cannot demonstrate their status through the ordinary Right to Work processes but may nevertheless have continuing permission to work.

Where applicable, the employer can ask the Home Office to verify the worker’s status.

A Positive Verification Notice can establish a time-limited statutory excuse.

This can be relevant where, for example, the individual has an outstanding qualifying immigration application and their existing rights continue while the Home Office is considering the matter.

Employers should therefore avoid assuming that lack of a new visa decision automatically means employment must end.

Challenging a Civil Penalty Notice

An employer does not have to accept a Civil Penalty Notice without review.

The notice can be challenged through the Home Office objection process.

The appropriate grounds depend upon the circumstances, but the employer may contend that:

• it is not liable;
• it had a statutory excuse;
• the individual was not employed illegally;
• the amount has been calculated incorrectly;
• relevant mitigating circumstances were not properly considered; or
• the Home Office’s factual basis is wrong.

The objection should be supported by evidence rather than merely asserting that the employer acted in good faith.

Relevant evidence may include:

• Right to Work records;
• Home Office online check results;
• share-code verification;
• Employer Checking Service correspondence;
• Positive Verification Notices;
• passport or immigration documents;
• employment records;
• recruitment records;
• emails;
• HR procedures; and
• evidence showing when checks were carried out.

The 28-Day Deadline

A Civil Penalty Notice gives the employer 28 days to respond.

Employers should treat this deadline seriously.

An effective review may require reconstructing:

• when the worker was recruited;
• when employment began;
• what immigration evidence was provided;
• who conducted the Right to Work check;
• which checking method was used;
• what records were retained;
• whether follow-up checks were required;
• whether an immigration application was pending; and
• what the Home Office alleges occurred.

Waiting until the final days of the response period can make it much harder to investigate these matters properly.

What Happens After an Objection?

The Home Office can reconsider the Civil Penalty Notice following an objection.

Depending upon its findings, it may:

• cancel the penalty;
• reduce the penalty;
• maintain the existing penalty; or
• in some circumstances, increase the penalty if relevant information justifies doing so.

If the employer remains dissatisfied after the objection process, a statutory appeal to the appropriate court may be available.

The correct next step depends upon the Home Office’s decision and the evidence available.

Employers should therefore obtain advice on the commercial and legal merits of continuing the challenge.

Civil Penalty Appeals

A civil penalty challenge can ultimately proceed to court where the statutory requirements for an appeal are met.

The court can consider issues concerning liability and the amount of the penalty.

An appeal should not be approached simply as an attempt to negotiate a lower figure.

The employer should have a clear evidential basis for challenging the Home Office’s decision.

Important issues may include:

• whether the worker was actually employed illegally;
• whether a statutory excuse existed;
• whether Right to Work checks were properly conducted;
• whether the Home Office correctly assessed the evidence; and
• whether the penalty amount is justified.

The strength of an appeal will depend heavily upon the records available.

Can a Civil Penalty Affect a Sponsor Licence?

Yes.

For licensed sponsors, an illegal-working civil penalty can create consequences beyond the fine itself.

Sponsor Licence holders are expected to comply with immigration law and maintain effective Right to Work systems.

A civil penalty can therefore become relevant to UKVI’s assessment of whether the organisation remains suitable to hold a Sponsor Licence.

Depending upon the circumstances and seriousness of the compliance failure, potential Sponsor Licence consequences may include:

• additional Home Office scrutiny;
• compliance visits;
• Sponsor Licence suspension; or
• Sponsor Licence revocation.

For a business that relies heavily upon sponsored workers, this can make the wider commercial risk considerably greater than the civil penalty amount alone.

Criminal Consequences of Illegal Working

The civil penalty regime should also be distinguished from criminal liability.

An employer can face criminal sanctions where it employs a person knowing, or having reasonable cause to believe, that they do not have the right to work in the UK.

The current GOV.UK guidance states that conviction can result in up to five years’ imprisonment and an unlimited fine.

This is reserved for more serious conduct than ordinary civil penalty liability.

Where allegations suggest deliberate or knowing illegal employment, employers should obtain urgent legal advice.

Publication and Reputational Risk

The consequences of a civil penalty can also include reputational damage.

The Home Office can publish information about businesses that receive illegal-working civil penalties.

This may be particularly significant for organisations that:

• operate regulated services;
• rely upon public contracts;
• tender for commercial work;
• depend upon international recruitment;
• operate franchises; or
• have substantial customer-facing reputations.

Civil penalty decisions should therefore be considered from a wider business-risk perspective.

Civil Penalty Compliance Audit

Where a civil penalty has been issued, the organisation should consider reviewing its wider Right to Work procedures.

A problem involving one worker can sometimes indicate weaknesses affecting a broader part of the workforce.

An internal compliance review may examine:

• all Right to Work records;
• online checking procedures;
• manual checks;
• eVisa procedures;
• follow-up check systems;
• Employer Checking Service referrals;
• sponsored worker files;
• HR responsibilities;
• training;
• document retention; and
• immigration expiry monitoring.

Where weaknesses are identified, remedial action can reduce the likelihood of further breaches.

This is particularly important because a later breach can attract the higher repeat-breach penalty of up to £60,000 per worker.

Common Civil Penalty Mistakes

Employers frequently make mistakes after receiving a penalty.

These can include:

• paying immediately without reviewing liability;
• missing the 28-day deadline;
• assuming no defence exists because the worker lacked permission;
• failing to locate historic Right to Work evidence;
• overlooking a pending immigration application;
• failing to use Employer Checking Service records;
• submitting an unsupported objection;
• ignoring Sponsor Licence consequences;
• failing to audit other workers; or
• dismissing affected employees without properly considering employment law risks.

A structured response is usually more effective than reacting solely to the headline financial demand.

What Should You Do After Receiving a Civil Penalty Notice?

An employer should act promptly.

Immediate steps should include:

1. Record the 28-day deadline.
2. Identify every worker named in the notice.
3. Preserve all employment and immigration records.
4. Review the original Right to Work checks.
5. Check whether a statutory excuse may exist.
6. Review any Home Office online checks or ECS evidence.
7. Establish the worker’s immigration position at the relevant time.
8. Check whether the penalty has been calculated correctly.
9. Assess Sponsor Licence consequences.
10. Decide whether an objection should be made.
11. Review the wider workforce for similar compliance problems.

Employers should avoid retrospectively altering records.

The aim should be to establish accurately what happened and what evidence existed at the relevant time.

How Knights & Shah Solicitors Can Help

At Knights & Shah Solicitors, we advise employers facing illegal-working civil penalties and associated immigration compliance problems.

We can assist with:

• reviewing Civil Penalty Notices;
• assessing liability;
• identifying statutory excuse arguments;
• Right to Work evidence;
• online checking issues;
• Employer Checking Service records;
• Positive Verification Notices;
• objections to civil penalties;
• penalty calculations;
• appeals;
• Sponsor Licence consequences;
• Home Office compliance visits;
• Right to Work audits;
• remedial HR procedures; and
• wider Sponsor Licence compliance.

Our focus is to determine whether the employer is genuinely liable, whether the penalty can be challenged and what steps are required to protect the organisation from further immigration compliance risk.

Contact Us

If you require advice contact Knights & Shah Solicitors.

We provide clear, solicitor led advice, strategic case planning and robust court representation to protect our clients.