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An Employer's Guide to Immigration Civil Penalty Notices

Navigating the complexities of immigration law can be a daunting task, especially for employers in the United Kingdom. Under the Immigration Act of 2016, employers can face civil penalties 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.

In this comprehensive guide, we will delve into the world of immigration civil penalties, shedding light on what they entail, how they are assessed, and what steps employers can take to mitigate or challenge these penalties.

What Is a Civil Penalty in Immigration Law?

Under the Immigration Act 2016, a civil penalty can be brought if an employer knew or had ‘reasonable cause to believe’ that their employee(s) did not have the 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 in immigration law act to prevent and discourage illegal working.

A civil penalty notice can occur following a Home Office compliance visit where a referral is made to the civil penalty compliance team. This team may then request further information about the worker(s) who were identified during the visit and information about any such right to work checks which have been carried out. 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 dictate whether or not a civil penalty is issued, or reduce the fee if one is issued.

What Can The Impact of a Civil Penalty Notice Be?

For an organisation’s first breach in three years, the starting penalty is £15,000 per illegal worker. The Home Office recently announced planned increases in 2024 to the maximum illegal working civil penalty, from £20,000 to £60,000. This blog post provides further details on these increases.

The amount payable for 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.

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. 

Mitigating Factors and Determining the Penalty

Mitigating factors which the Home Office consider when considering the penalty include:

  • Reporting: If you have a history of reporting suspected illegal workers to the Home Office, the fee could be reduced by £5,000;
  • Active Cooperation: If you have actively cooperated with the Home Office throughout the investigation the fee could be reduced by a further £5,000;
  • Effective Right to Work Procedures: If you have effective document checking practices regarding employees’ right to work this can reduce the civil penalty notice to being a warning notice and thus no fee is due.

Criminal proceedings can also be brought against an employer who has knowingly employed illegal workers, an offence which is punishable by up to 5 years’ imprisonment and/or an unlimited fine. 

Two Options: To Pay or To Challenge?

You can challenge a civil penalty notice by written objection and the date by which this must be done will be contained in the notice itself. Whether you have decided to pay the fee or to challenge it, you must respond to the Home Office within 28 days. 

It is also possible to request an instalment payment plan over usually 24 months and exceptionally up to 36 months at this stage. To do this, you should provide details of your ability to pay over the plan period and why you cannot pay the penalty in full.

Grounds Of Challenge

There are three grounds on which you can challenge the penalty when you are applying to either appeal to remove the penalty, or to reduce it. These are:

  • You are not liable to pay the civil penalty, including because you are not actually the employer of the illegal worker(s) in question;
  • You have a statutory excuse, where you conducted a compliant right to work check;
  • The amount of the penalty is too high, where this has been miscalculated or you can show that you have met certain mitigating criteria which has not been taken 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. 

You should note that the Home Office is able to increase the original penalty at the appeal stage so prior to challenging the penalty, you should consider seeking legal advice as to the merits of challenging a civil penalty notice and consider your organisation’s circumstances, including the impact on sponsored workers.

The appeal may consequently proceed to the County Court, and therefore be considered by those external to the Home Office.

Possible Consequences: Revocation of Sponsor Licence

It is possible for the Home Office to downgrade or revoke your 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?

As set out in this blog post, employers will have a statutory excuse should it later arise that an employee did not have the right to work, if they have carried out compliant right to work checks prior to commencement of employment. Note that the right to work check must be compliant and if it is not, there is 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.  

Contact our Immigration Barristers

For expert advice and assistance with your immigration matter, including responding to civil penalty notices, contact our immigration barristers in London on 0203 617 9173 or via our enquiry form below.


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