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The £60,000 Question Every Employer Should Be Asking

Imagine Immigration Enforcement attends your workplace tomorrow.

They ask to see the right to work records for several employees. Your HR team is confident that checks were carried out when those employees joined, but when the files are opened, one check was completed after the employee's start date, another contains only a copy of an immigration document, and a third employee's time-limited permission expired months ago without a follow-up check being completed.

The employees may have been working for the business for years without any apparent problem.

But from a compliance perspective, those seemingly small administrative gaps can become extremely expensive.

Under the current illegal working civil penalty regime, an employer can face a penalty of up to £45,000 for each illegal worker for a first breach. Where the employer has committed a repeat breach within the relevant three-year period, the penalty can reach £60,000 for each worker.

For employers in sectors such as care, hospitality, retail, construction and other labour-intensive industries, the exposure can multiply very quickly.

Three workers could potentially mean a six-figure liability.

The more important question for employers is therefore not simply whether they carry out right to work checks.

It is whether those checks would actually protect the business if the Home Office examined them today.

What is illegal working?

UK employers have a legal responsibility to prevent illegal working.

A person may be working illegally where their immigration status does not permit them to undertake the employment in question. This can include someone who has no permission to remain in the UK, someone whose permission has expired, or someone whose immigration conditions prohibit the particular work they are doing.

The issue is not limited to people with no immigration documentation at all.

An employee may have valid immigration permission but still be restricted in the type of work they can undertake, the number of hours they can work or the employer for whom they are permitted to work.

Employers therefore need to establish not simply that an individual has some form of UK immigration status, but that they have the right to carry out the specific employment being offered.

How much is the civil penalty for employing an illegal worker?

The maximum civil penalty increased significantly from 13 February 2024.

For a first breach, the starting point can be £45,000 for each illegal worker. For a repeat breach within the relevant three-year period, the starting point can rise to £60,000 for each worker.

The final amount may depend on the circumstances and any mitigating factors available under the civil penalty scheme.

However, employers should not assume that a substantial reduction will necessarily be available.

The financial risk becomes particularly serious where several workers are involved.

A restaurant employing three people without the required permission could potentially face penalties reaching £135,000 on a first breach. A repeat offender could potentially face exposure of £180,000 for the same number of workers.

And the civil penalty may only be the beginning.

What is a statutory excuse?

The law provides an important protection for employers who follow the correct right to work checking procedure.

Where an employer completes the prescribed check properly before employment begins, they can establish what is known as a statutory excuse.

A statutory excuse is a legal defence against liability for a civil penalty if the employee is later discovered to have been working illegally.

This is why right to work compliance is not simply about asking someone whether they have permission to work or keeping a copy of an immigration document.

The employer needs to carry out the appropriate prescribed check and retain the required evidence.

Where this has been done correctly, the employer may be protected even if it later turns out that the employee did not have the right to carry out the work.

However, the protection is only as strong as the check itself.

Right to work checks must be completed before employment starts

Timing is critical.

A prescribed right to work check should be completed before the employee starts work.

An employer who checks someone's immigration position after they have already begun employment may discover that the individual does have permission to work, but the delayed check may not provide the statutory protection the employer expected for the earlier period.

This is one of the most avoidable compliance failures we see.

A business may have a good recruitment process and a genuine intention to comply with the law, but an employee starts on Monday while HR completes the immigration paperwork on Tuesday.

From an operational perspective, this may feel like a minor delay.

From a right to work perspective, timing matters.

Which right to work check should an employer use?

The correct method depends on the employee's nationality and immigration status.

For many non-British and non-Irish citizens, employers will need to use the Home Office online right to work checking service. The employee normally provides a share code, which allows the employer to access their immigration status directly through the Home Office system.

British and Irish citizens may be checked through an appropriate manual document check or, where applicable, an approved digital verification process.

There are also situations where the Home Office Employer Checking Service must be used.

This can arise, for example, where an individual has an outstanding immigration application, appeal or Administrative Review and their right to work cannot be confirmed through the ordinary online service.

In those circumstances, a Positive Verification Notice from the Employer Checking Service may provide the employer with a time-limited statutory excuse.

The important point is that employers cannot simply choose whichever method is most convenient.

The checking method must be appropriate for that particular employee.

Why keeping a photograph of a document may not be enough

A common misunderstanding is that keeping a photograph or scan of an immigration document proves that a right to work check has taken place.

It does not necessarily do so.

The statutory excuse depends on carrying out the prescribed process.

Where the Home Office online service is required, relying solely on a screenshot, visa image, BRP photograph or document sent by WhatsApp may not establish the required defence.

Similarly, where a manual check is permitted, the employer must follow the applicable process rather than merely storing a document in the personnel file.

Right to work compliance is therefore a process, not a document collection exercise.

Time-limited immigration permission creates an ongoing responsibility

Some employees have an unlimited right to work in the UK. Once a compliant check has been carried out for such a person, a further check will not normally be required.

The position is different for employees whose right to work is time-limited.

Where the employer's statutory excuse is also time-limited, a follow-up check will normally be required before that protection expires.

This is where otherwise compliant businesses can become exposed.

The initial recruitment check may have been completed perfectly, but nobody records when the employee's immigration permission expires.

Two years later, the employee remains on payroll and the original statutory excuse has ended.

Employers with significant numbers of migrant workers should therefore treat follow-up monitoring as part of their core HR compliance system rather than relying on individual diary reminders.

What happens if an employee has applied to extend their visa?

An employee whose immigration permission is approaching expiry may make a valid application to extend or vary their permission before the existing leave expires.

Depending on the circumstances, their existing immigration conditions may continue while that application is being decided.

However, employers should not rely solely on an employee telling them that an application has been submitted.

The right to work position must be established through the appropriate Home Office process.

In some circumstances the employee's status may be verifiable through the online right to work service. In others, the employer may need to use the Employer Checking Service and obtain a Positive Verification Notice.

The important issue is maintaining evidence of the employer's statutory excuse throughout the period of employment.

The criminal consequences of knowingly employing an illegal worker

Civil penalties generally deal with employers who fail to prevent illegal working.

More serious cases can move into criminal law.

An employer may commit a criminal offence where they employ someone who is disqualified from working because of their immigration status and the employer knows, or has reasonable cause to believe, that the individual is not permitted to undertake the employment.

On conviction on indictment, the offence can carry a sentence of up to five years' imprisonment and an unlimited fine.

The phrase “reasonable cause to believe” is particularly important.

An employer cannot necessarily avoid criminal liability simply by saying that nobody formally told them the employee was working illegally.

If there was information available that should reasonably have alerted the employer to the problem, the risk can be much more serious.

What does illegal working mean for a sponsor licence?

For organisations holding a sponsor licence, illegal working creates another layer of risk.

Licensed sponsors are specifically required to carry out right to work checks on the workers they sponsor and must ensure that sponsored workers have the appropriate immigration permission to undertake their roles.

Current Sponsor Guidance makes clear that where a civil penalty is issued for employing an illegal worker, the Home Office is likely to consider sponsor licence action.

Depending on the circumstances, this may include suspension or revocation.

The consequence can extend far beyond the employee whose right to work caused the original problem.

If a sponsor licence is revoked, the organisation loses its ability to sponsor workers and the Home Office may take action against the immigration permission of existing sponsored employees.

For a business that relies heavily on sponsored staff, the operational impact can be severe.

A practical example

Consider a care provider employing 70 members of staff, including 15 workers with time-limited immigration permission.

The company has a right to work policy, and the initial checks were completed when the employees joined.

However, the HR manager who monitored visa expiry dates leaves the company. Responsibility is transferred informally to another employee, but no central monitoring system exists.

Several months later, one employee's statutory excuse has expired. The employee says that they submitted a visa extension application, but nobody verifies this through the Home Office system.

The employee continues working.

If Immigration Enforcement later investigates, the employer may find itself trying to reconstruct evidence after the event.

This is precisely the situation that good compliance systems are designed to prevent.

The question should not be whether someone in HR remembers that the employee applied for a visa.

The records should demonstrate what was checked, when it was checked and what evidence established the right to work.

Right to work compliance should be consistent across the organisation

Another common weakness arises where different managers use different checking procedures.

A company may have an excellent written policy at head office, while individual branches operate differently in practice.

One manager may use the Home Office online service correctly. Another may accept screenshots from employees. A third may leave all immigration checks to a recruitment agency without establishing who is legally responsible.

When the Home Office investigates, the existence of a written policy alone may not be enough.

The actual practice matters.

Businesses operating across several locations should therefore ensure that responsibility for right to work checks is clearly allocated, staff carrying out checks are properly trained and the same process is applied consistently.

Could your records survive a Home Office compliance visit?

A useful internal exercise is to take a sample of personnel files and review them as though you were a Home Office compliance officer.

Could you establish from each file that the right to work check was completed before employment started?

Does the record demonstrate that the correct checking method was used?

Where an online check was conducted, has the appropriate evidence been retained?

Where permission was time-limited, is the follow-up requirement clearly recorded?

If a visa application was pending, can you demonstrate how the continuing right to work was verified?

These questions should be answerable from the records themselves.

If compliance depends on someone explaining from memory what happened three years ago, the system is already vulnerable.

The reputational consequences of illegal working

Civil penalties can also become public.

The Home Office publishes quarterly reports identifying certain employers that have received civil penalties for employing illegal workers.

For some organisations, the reputational consequences can be as serious as the financial penalty.

A care provider tendering for public-sector contracts, a restaurant dependent on customer reputation or a regulated business seeking investment may face difficult questions if its name appears in connection with illegal working enforcement.

Right to work compliance should therefore be viewed as part of wider corporate governance and risk management, not merely an HR formality.

What should employers do now?

Employers should periodically review their right to work systems against the current Home Office guidance rather than assuming that a process created several years ago remains compliant.

The Home Office has moved increasingly towards digital immigration status and online verification, and right to work procedures have changed significantly over recent years.

Employers should also ensure that follow-up checks are centrally monitored, records are retained correctly and employees responsible for recruitment understand when they need to use the online service or Employer Checking Service.

For sponsor licence holders, right to work procedures should also form part of wider sponsor compliance audits.

The objective is simple: if Immigration Enforcement attended tomorrow, the business should be able to demonstrate compliance from its records without needing to reconstruct what happened afterwards.

How GigaLegal Solicitors can help

At GigaLegal Solicitors, we advise employers on right to work compliance, illegal working investigations and sponsor licence obligations.

We can review existing right to work procedures, identify weaknesses in historic records and advise businesses on establishing compliant systems for new and existing employees.

Where an employer has received a Civil Penalty Referral Notice or Civil Penalty Notice, we can assess the circumstances, review whether a statutory excuse exists and advise on the available objection or appeal process.

For licensed sponsors, we can also consider the wider sponsor licence implications and advise on responding to Home Office compliance action.

Early advice can be particularly important where a business identifies a potential illegal working issue before the Home Office becomes involved.

Speak to GigaLegal About Right to Work Compliance

The cost of an incorrect right to work process can now reach tens or hundreds of thousands of pounds.

For businesses that hold a sponsor licence, the consequences may extend to the ability to continue employing sponsored workers at all.

If you are unsure whether your current right to work procedures would withstand Home Office scrutiny, contact GigaLegal Solicitors.

Our Business Immigration team can review your processes, advise on specific employees and help your organisation strengthen its compliance position before a problem becomes an enforcement matter.

Disclaimer

This article is provided for general information only and does not constitute legal advice. Right to work requirements and Home Office guidance are subject to change, and the appropriate checking process depends on the circumstances of the individual worker. Employers should obtain tailored legal advice where there is uncertainty about an employee's right to work or potential exposure to a civil penalty.