Illegal working and the Immigration Act 2016 – What do Employers need to know?

The document(s) provided will usually be the individual's passport and, if the employee is a migrant worker [i.e. a non-European Economic Area or Swiss national], a visa stamp/Biometric Residence Permit. However, the Home Office has two lists of documents that can be used to evidence the right to work for either the entire period of employment or a specified period of time.

Under s.15 of the Immigration Asylum and Nationality Act 2006 (the "IAN"), a company may be liable for a civil penalty (of up to £20,000) if it employs an individual who does not have the right to work.

However, by undertaking the required document checks, a company will have a "statutory excuse" against liability for illegal working penalties; meaning that, if the Home Office finds out that a company has employed someone who does not have the right to work but the appropriate checks were conducted, the company will not receive a civil penalty in respect of that employee.

A company that knowingly employs an individual who does not have the right to work commits an offence and cannot have a statutory excuse regardless of whether document checks were undertaken. The criminal sanction for knowingly employing an illegal worker was a maximum sentence of two years' imprisonment and/or an unlimited fine.

New Illegal Working Offences

The key changes introduced by the Immigration Act 2016 (the "IA") are, in summary:

• Employee criminal offence: A person commits the offence of illegal working if (a) he is subject to immigration control [i.e. requires permission to lawfully work in the UK] and works when disqualified from doing so; and (b) at the time knows or has reasonable cause to believe that he is disqualified from working by virtue of his immigration status.

  A person is "disqualified" from working if he has not been granted an appropriate immigration permission or if his immigration permission is invalid, has ceased to have effect (e.g. because it has expired, been cancelled by his employer or curtailed by the Home Office) or is subject to a condition preventing him from undertaking the work in question.

  The offence – which applies to all types of work including apprenticeships and self-employment - carries a maximum sentence of six months' imprisonment and/or an unlimited fine. The IA also enables the earnings of illegal workers to be seized under the Proceeds of Crime Act 2002.

• Employer criminal offence: The IA has extended the employer offence to cover not just knowing that an individual does not have the right to work, but also circumstances where the company has "reasonable cause to believe" that the individual is disqualified from the employment. Disqualification is assessed in the same way as for the employee offence.

  This means that an employer may no longer evade prosecution where there is no proof that it knew an employee had no permission to work. It will be sufficient if there is information that might lead a company to reasonably believe this. The Home Office has yet to provide comprehensive guidance on what constitutes a "reasonable cause", but it is clear that the threshold for criminal liability has been reduced.

  Further, whilst the potential for an unlimited fine remains, the new offence has increased the maximum sentence on indictment from two years' imprisonment to five years' imprisonment.

Other provisions

It should be noted that the IA has also:

• increased powers for Immigration Officers to enter business premises to search for documents and to seize and retain evidence in relation to an offence;
• provided the Home Office with the power to impose compliance sanctions and close businesses that continue to employ illegal workers; and
• created the power to appoint a new Director of Labour Market Enforcement to oversee labour market regulators and to provide a co-ordinated strategy for enforcement and compliance.

The IA also provides for:

• there to be a requirement that public authorities ensure that public sector workers in customer-facing roles speak fluent English; and
• the Home Office to introduce an "Immigration Skills Charge" on certain employers who sponsor non-EU skilled workers.

This is anticipated to come into force in April 2017 for Tier 2 employers at a rate of £1,000 per migrant per year.

Conclusion

The Home Office has always taken the prevention of illegal working seriously but there has been a marked increase in activity in recent years, with published figures showing that the Home Office issued over 1,000 civil penalties between 1 July and 31 December 2015 with fines in excess of £20 million.

Common pitfalls for employers include:

• allowing individuals who enter the UK with a Standard Visitor Visa to undertake work;
• allowing students to work in breach of the terms of their visa, e.g. by filling a permanent position or working in excess of the permitted number of weekly hours; and
• employing individuals with a working visa in a role that is not permitted, e.g. allowing a Tier 1 (Entrepreneur) migrant to undertake a role that is not related to his entrepreneurial venture.

The introduction of the new penalty regime suggests that the Home Office is likely to increase its efforts in preventing illegal working and employers should prepare themselves for compliance audits, particularly those who hold sponsor licences. It will also be important to educate migrant employees on the potential consequences of working illegally in view of the new offence introduced by the IA.

Employers must be aware of their obligations and this inevitably places responsibility on HR, Recruitment and Talent Management professionals to understand the immigration landscape and reduce the risk of prosecutions.

The Home Office has a number of Guidance notes and Codes of Practice on the prevention of illegal working, including on how to carry out a right to work check and how to avoid race discrimination whilst preventing illegal working.

Bird & Bird also has a dedicated Business Immigration team who regularly advise on illegal working issues. Please contact us using the details below if you have any questions.