Illegal Working Civil Penalties

To further monitor and subdue businesses hiring people to work illegally across the UK, the Home Office’s Immigration Enforcement teams have been increasing operational efforts and arrests.

Figures shared by the Home Office have shown that since the new government came into power in July 2024, the number of illegal working visits has increased by 34% and the number of arrests has increased by 25%, compared to the same period in the previous year.

With this in mind, we’re sharing some crucial information for employers on civil penalties, things to take into account if you need to navigate the civil penalty process, and how this can be avoided by following correct employment protocols.

What is the illegal working civil penalty scheme?

Civil penalty fines are issued to employers who have been employing someone who doesn’t have the right to work in the UK. Penalties are issued by the Home Office and can be administered for multiple employees within a business if required.

If an employer knowingly employs an individual without the legal right to work in the UK, they may face criminal prosecution under Section 21 of the Immigration, Asylum and Nationality Act 2006.

As stated in the Immigration, Asylum and Nationality Act 2006, employers may be required to pay a prescribed fine if found to have employed someone who:

• Has not been granted leave to enter or remain in the UK; or
• Has leave to enter or remain in the UK that:
  • Is invalid.
  • Has ceased to have effect.
  • Is subject to a condition that prevents them from accepting employment.

The illegal working civil penalty process

If an employer is found to have hired an individual without the right to work in the UK, they may be subject to a civil penalty. The process typically follows these steps:

1. Breach Identification
The Home Office identifies a breach where an employer is found to have hired an individual who does not have the legal right to work in the UK.

2. Civil Penalty Referral Notice
If a breach is suspected, the employer may receive a Civil Penalty Referral Notice, which outlines:

• The details of the alleged breach.
• The potential legal consequences.
• The next steps in the penalty consideration process.

3. Home Office Information Request
The employer will have an opportunity to provide evidence demonstrating a statutory excuse, which may exempt them from liability. Employers should submit:

• Proof that they conducted right-to-work checks before employment.
• Documentation supporting their compliance efforts.

Deadline: Employers must respond within 10 days of receiving the request. Prompt cooperation may lead to a reduced penalty.

4. Home Office Decision
Following the review of all evidence, the Home Office will issue one of the following outcomes:

• No Action Notice – No further action is required if the employer is found not liable.
• Warning Notice – A formal warning is issued, noting the breach but not imposing a penalty at this time.
• Civil Penalty Notice – A penalty is imposed, outlining:
  • The reasons for the employer’s liability.
  • The penalty amount and payment deadline.
  • Options for objection or appeal.

5. Paying or Objecting to the Penalty
If a Civil Penalty Notice is issued, the employer must:

• Pay the fine by the deadline specified in the notice.
  • If paid within 21 days, a 30% reduction may apply (for first-time penalties only).
• Alternatively, object to the penalty within 28 days, providing evidence under one of the permitted grounds.

6. Potential Appeal
If the Home Office maintains the penalty after an objection, the employer has the right to appeal to:

• The County Court (England, Wales, or Northern Ireland).
• The Sheriff Court (Scotland).

Deadline: The appeal must be submitted within 28 days of the objection outcome notice.

Civil penalty fines

Civil penalty fines will differ in amount due to several factors, including whether the company has been found guilty of employing workers illegally in the past, and whether past right-to-work checks have been completed by the employer.

Penalty amounts can be as high as £60,000 per illegal worker in cases of repeat non-compliance, effective from January 2024

Objecting to a civil penalty

Employers that have received a civil penalty can object to the Home Office within 28 days of the due date specified on the notice.

If choosing to do this, employers must be able to share information and evidence supporting one or multiple of the ‘acceptable grounds for objection’ as set out on the Objection Form, including but not limited to:

• The employer isn’t liable to pay the penalty (e.g. they are not the employer of the worker in question;
• The employer has a statutory excuse (e.g. they completed the required right-to-work checks before employing the individual),
• The penalty is too high (e.g. the Home Office has miscalculated the penalty or the employer has evidence that may counteract the original penalty).

Following submission of the Objection Form and further investigation, the Home Office will then share additional information with the employer as to whether their penalty is to be cancelled, reduced or maintained.

If the penalty should now be increased, however, a new civil penalty notice will be sent to the employer.

Appealing a civil penalty

When an employer has objected to a civil penalty and has still been found liable, they may then appeal to the County Court (in England, Wales or Northern Ireland) or the Sheriff Court (in Scotland) if they’re not satisfied with the decision made.

The same grounds must be in place for both the original objection and the new appeal.

If appealing, the employer must choose to appeal within 28 days of the date specified on the objection outcome notice, or the new civil penalty notice following the objection.

Next steps

If your business has been issued a civil penalty or you need guidance on right-to-work compliance, our expert immigration team can assist. Avoid costly penalties and ensure compliance—contact Five Star International today.

Compliance and maintenance of correct HR procedures, Sponsor Licence status and business immigration can be time-consuming and overwhelming.

If you’re looking for business support, speak to a member of our team for more information on how Five Star can help you.

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