The Home Office is carrying out a consultation on the civil penalty regime applicable to employers that are found to be employing individuals with no permission to work in the United Kingdom. The civil penalty regime has been in place since February 2008 and imposes fines of up to £10,000 for each employee found to be working without permission, together with a requirement for employers to carry out annual employment verification checks for those with limited leave to remain.

The consultation and online survey make it clear that the Home Office is considering the following changes to the existing legislation:

  • increasing the civil penalty from £10,000 to £20,000 for repeat offenders, with a maximum penalty of £15,000 for first-time offenders;
  • simplifying the formula for calculating the penalty and the factors for reducing this where employers cooperate and report;
  • ceasing the existing process of sending a warning letter to first-time offenders;
  • taking previous civil penalties into consideration as an aggravating factor when determining the penalty level;
  • reducing the number of acceptable documents that can be produced to simplify right-to-work checks;
  • using a biometric residence permit as the main acceptable document for right-to-work checks for most non-European Economic Area nationals;
  • removing the requirement for employers to conduct annual checks on employees with limited permission to reside in the United Kingdom and instead requiring them to check only at the end of their visa; and
  • introducing measures to allow recovery of a civil penalty from directors and partners of limited liability businesses following failure to pay by the business.

The proposed changes are welcome, in that they appear to be aimed at simplifying the existing regime for preventing illegal working and for targeting repeat offenders. In particular, removing annual employment verification checks for those employees with long-term permission to work is welcome, as this is an unnecessary and burdensome requirement. However, removing the first warning process may mean that new employers and start-up businesses could now face penalties for first-time inadvertent breaches without being given the opportunity to show that they can be compliant. There are also significant risks that by reducing the number of acceptable documents proving a person's right to work, some migrants who are lawful long-term residents without the new biometric residence permits will be unable to access employment.

For further information on this topic please contact Ilda De Sousa at Kingsley Napley by telephone (+44 20 7814 1200), fax (+44 20 7490 2288) or email (idesousa@kingsleynapley.co.uk). The Kingsley Napley website can be accessed at www.kingsleynapley.co.uk.

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