CIVIL PENALTIES

Under the Immigration Act 2016, employers can face a civil penalty if they are found to have knowingly employed individuals without the legal right to work in the UK. These penalties are not just financial; they can also have significant repercussions on an organisation’s reputation and its ability to hire foreign workers in the future.

The maximum civil penalty that an employer can be required to pay is £45,000 per illegal worker for a first time offender or £60,000 per illegal worker for a repeat offender.

If you have received a Civil Penalty Referral Notice or a Civil Penalty Notice, contact our specialist civil penalty immigration barristers on 0203 617 9173 or complete our enquiry form below.

What Is an Immigration Civil Penalty?

Under the Immigration Act 2016, a Civil Penalty Notice may be issued by the Home Office if it considers that an employer knew or had ‘reasonable cause to believe’ that their employee(s) did not have a right to work in the UK.  This includes migrants who are breaching the conditions of their current permission by working in the UK. Civil penalties act to prevent and discourage illegal working.

What Is the Maximum Amount of a Civil Penalty?

For an organisation’s first breach, the Home Office may impose a maximum civil penalty fine of £45,000 per illegal worker.  Repeat offenders may be subject to a maximum fine of £60,000 per illegal worker.

The amount payable by way of a civil penalty will be assessed holistically. If an employer has previously employed illegal workers, the fine will increase. If mitigating factors apply, the fine can decrease.

Mitigating factors which the Home Office may consider when considering the amount of a penalty include:

• Reporting: If the employer has a history of reporting suspected illegal workers to the Home Office, the fine may be reduced;
• Active Cooperation: If the employer has actively cooperated with the Home Office throughout the investigation then the fine may be reduced;
• Effective Right to Work Procedures: If the employer can demonstrate effective document checking practices regarding employees’ right to work then this may reduce the civil penalty notice to a civil penalty warning notice, thereby removing liability for a fine.

The Civil Penalty Notice will set out that there is a 30% reduction in the total penalty for fast payment, which is usually within 21 days.

• An Employer’s Guide to Immigration Civil Penalty Notices
• Fines for Illegal Working to Triple from 13 February 2024

What Is the Home Office Civil Penalty Process?

If, following a Home Office compliance visit, an employer is found to be employing an individual or individuals who are disqualified from working due to their immigration status, the employer will first be served with a Civil Penalty Referral Notice. This notice will tell the employer that their case is being referred to Home Office officials for liability for a civil penalty to be determined. 

Following service of a Civil Penalty Referral Notice, the Home Office will make an Information Request. The Home Office will contact the employer and provide them with an opportunity to present further information and evidence about the worker(s) who were identified during the visit, as well as information about any right to work checks which were carried out. This may give rise to a statutory excuse which can be used to determine the employer’s liability. 

The employer will have 10 days to complete an Information Request Response Form and attach evidence. It is important to provide extensive evidence at this stage as it can determine whether or not a civil penalty is issued.  Alternatively, comprehensive submissions at this stage may reduce the amount of the civil penalty, if one is issued.  If an employer responds to the Information Request within 10 days then this will be considered as “active co-operation with the process” and could result in the level of the civil penalty being reduced. 

If you have received a Civil Penalty Referral Notice or Information Request, our immigration barristers can provide you with expert advice on the information and evidence that should be provided to the Home Office.  Contact our business immigration team for further advice.

Following receipt of the Information Request Response Form from the employer, the Home Office will review all the available evidence and come to a conclusion as to the employer’s liability.

Where an employer is found liable, they will be issued with a Civil Penalty Notice. This will detail the reasons for liability, the amount payable, the ways in which payment may be made and provide the employer with information as to how they may object to the penalty. The Civil Penalty Notice will be accompanied by a Statement of Case setting out the evidence and reasons for the Home Office’s decision. 

A Warning Notice may be issued instead of a Civil Penalty Notice. This is a step down from a Civil Penalty Notice and will state the reasons why the employer escaped a penalty being issued on this occasion. It is a formal warning and will be taken into account if an employer breaches the Right to Work Scheme again.

If an employer is found not liable for a civil penalty, they will be issued with a No Action Notice. This will clarify that there will be no further action taken on this occasion and the case will be closed. This type of Notice will not be considered in the future for the purpose of calculating penalty amounts in the event of any future breach of the Right to Work Scheme.

What Should I Do if I Receive a Civil Penalty Notice?

If you receive a Civil Penalty Notice, you will have two options – pay the civil penalty or object to the civil penalty.  If you object to the civil penalty and do not agree with the Home Office’s decision in relation to your objection, you may appeal the Home Office’s decision to the County Court. 

If you do not pay the penalty, object or appeal by the due dates, the Home Office will commence court action against you. If the Home Office is successful, you will have a County Court Judgment against you. This may impact upon your credit rating and affect your ability to act as a company director.

It is also a criminal offence to knowingly employ an illegal worker, or employ an illegal worker where you had reasonable cause to believe that they did not have the right to work in the UK. You may face up to five years’ imprisonment and/or an unlimited fine.

Pay a Civil Penalty

If you do not wish to contest the penalty, you will be required to pay the specified amount by the date stated in the Civil Penalty Notice. There will be an opportunity to have the amount reduced by 30% if full payment is made within 21 days. This is called the Faster Payment Option (“FPO”).  It is important to note that this option is only available to employers who are in receipt of their first penalty and it also cannot be paid in instalments. 

You may request permission to pay the amount in instalments from the Home Office’s Shared Service Centre, where the FPO is not being used. This will mean the amount can be paid over a determined period, usually up to 24 months. You will, however, likely need to provide the reasons as to why you are unable to pay the full penalty amount in one go. 

Object to a Civil Penalty

You may object to the issuing of a Civil Penalty Notice. You will need to do so in writing within 28 days of the due date specified in the Notice. It is important to note that if you object before the deadline, you will continue to be eligible for the FPO, where it is your first breach. Reasons for the objection and evidence in support will need to be provided and will also need to be in line with one or more of the acceptable grounds for objection which are set out on the Objection Form. Such grounds are: 

• You are not liable to pay the penalty (e.g. you are not the worker’s employer);
• You have a statutory excuse (e.g. you undertook the correct right to work document checks); or
• The level of the penalty is too high (e.g. the Home Office did not take mitigating circumstances into account).

Only mitigating factors which are referenced in the Home Office’s published Consideration Framework will be considered. These are the same mitigating factors as set out above, but you will need to include extensive evidence to demonstrate why such factor(s) apply. 

The Home Office will consider the objection and will send an Objection Outcome Notice which will set out whether the penalty is to be cancelled, reduced or maintained.  If you are still required to pay the amount, you will have 21 days to pay in full from the date specified in the Objection Outcome Notice. A penalty can also be increased and in these circumstances, a new Civil Penalty Notice will be issued. You should expect a Statement of Case with each of the notices issued by the Home Office.

Appeal a Civil Penalty

It is possible for an employer to appeal the Home Office’s decision in relation to an objection. In England, Wales and Northern Ireland an appeal can be made to the County Court. Any appeal must be lodged within 28 days of either the date specified on the Objection Outcome Notice or the date specified on the new Civil Penalty Notice. An appeal may only be made on the same grounds on which an employer could have objected to the penalty. It is important to note that if the appeal does not succeed, a court may order that the employer also pay the reasonable costs/expenses incurred by the Home Office in defending the appeal.

Consequences of Receiving a Civil Penalty

The Home Office publishes lists of all civil penalties imposed on companies. These are freely accessible to the public using the Home Office website. The Home Office often also issues press releases to local and national media, naming companies that have employed workers illegally.

If you later apply for a Sponsor Licence with a view to sponsoring foreign workers, any history of employing workers illegally will affect your application.

It is possible for the Home Office to downgrade or revoke a sponsor licence following a civil penalty notice. The guidance states that:

if we issue you with a civil penalty, we are likely to revoke your licence and you will not be eligible for a new licence until at least 12 months have passed since you have paid the civil penalty in full (this period could be up to 5 years if you are issued with more than one civil penalty)

The above refers to the cooling off period starting from 12 months in which you cannot apply for a new sponsor licence. 

A civil penalty notice may also impact an individual’s ability to be a company director if enforcement action is taken against them. 

How Can Employers Avoid Civil Penalty Notices?

You can avoid incurring a civil penalty by conducting appropriate right to work checks. 

If you have carried out compliant right to work checks prior to commencement of employment, you will have a statutory excuse should it later arise that an employee did not have the right to work.  Note that the right to work check must be compliant and if it is not, there will be no statutory excuse. You may wish to refer to the Employer’s guide to right to work checks, available here.

Therefore, it is vital that compliant right to work checks are carried out prior to the worker commencing employment and that record keeping is kept up-to-date in the event of a compliance visit.  

Document checks will not protect you against prosecution if you knew the worker did not have permission to work, or if you could reasonably have known.

How Our Immigration Barristers Can Help

It is increasingly important that employers undertake the appropriate right to work checks and continue to do so as required throughout an employee’s employment. If you would like any general or specific support about ensuring that you are conducting your right to work checks appropriately, please get in touch with one of our immigration barristers.

If you have been issued with a Civil Penalty Referral Notice or Civil Penalty Notice, our immigration barristers can advise as to the likelihood of establishing a statutory excuse or demonstrating mitigating circumstances . We also provide legal representation at civil penalty appeals in the County Court.

We pride ourselves on being approachable and proactive in understanding and meeting our clients’ needs. We are a highly driven team, dedicated to providing clear and reliable immigration advice to employers as part of a professional and friendly service.