Tough new rules force business owners to check on the legal status of staff

The government has been accused of forcing business owners to act as an arm of the immigration service through tougher rules on the employment of illegal migrant workers.

From February 29, any business owners caught with illegal migrant workers on their payroll will be liable to a new civil penalty of up to £10,000 per employee.

Employers may avoid the penalty if they have taken reasonable steps to ensure the validity of documents belonging to their staff, such as checking photographs and date of birth against appearance or retaining a copy of documents for at least two years after the person stops working for them.

But Federation of Small Businesses (FSB) said it was worried that business owners would be penalised for hiring people with false documents and that policing immigration should be the responsibility of the government, not employers.

Simon Briault, FSB spokesman, said the organisation's main concern was that the government increasingly saw small business owners as additional immigration officers.

"We are quite happy if they want to clamp down on people working illegally in the UK, but it should not be the responsibility of employers to check up on workers."

Kieran O'Keeffe, policy adviser at the British Chambers of Commerce, said: "While it is important that firms that may be intent on operating illegally are punished, there must be better support and advice for businesses to ensure that stricter financial penalties do not create a disincentive to employ migrant workers."

Companies in the hospitality sector, where staff turnover rates can be 25 per cent a year, are likely to be the first port of call in the government's clampdown, according to Wedlake Bell, a law firm.

David Israel, a partner at Wedlake Bell, warned that employers should not imagine they are exempt from the new rules because they use agencies to take up references for new staff.

"Outsourcing the checking process to an immigration specialist or agency does not protect the company from liability should the government find out that it is employing an illegal worker, even if this is done so unknowingly by the company," he said.

Employers should ensure that original documentation is provided by applicants and should not allow them to start work until all necessary checks are deemed satisfactory, according to Wedlake Bell.

Companies that employ people with time-limited leave to be in the UK must carry out repeat checks at least once a year to ensure that they have a defence against prosecution.

Lena Björk, founder of London-based catering business Inn or Out, now insists on keeping detailed records of the 120 she uses as casual staff after HM Revenue & Customs issued her with a £200,000 fine a few years ago for employing staff who worked longer hours than they had claimed.

"We constantly recruit because most people are not around for more than three months," Björk said. "You just have to have a mindset to do what is necessary."

Business owners should only keep an employee's original documents for the period necessary to comply with the new law. Employers will have the right within a certain period to object to any penalty fine to the Border and Immigration Agency or appeal to the courts.

Published in The Financial Times, 23 February 2008