Illegal Working: Is Your Business at Risk?

Recent changes to regulations regarding the employment of overseas nationals mean that the penalties for employing illegal workers are potentially very serious.

Over the last few months the UK Border Agency (UKBA) has raided a number of businesses to establish whether workers are employed illegally and whether the employer can satisfactorily demonstrate the right to work for all employees (British and foreign nationals).

In 2010 UK businesses were fined in excess of £10 million; in November 2010 alone, businesses in the Midlands and East of England paid fines in excess of £1 million. Where employers fail to provide documentation proving that employees have the right to work in the UK, the UKBA will issue a Notice of Potential Liability for a civil penalty. If the employer is unable to successfully challenge that Notice they could be issued with a civil penalty of up to £10,000 for each illegal worker. A criminal prosecution may also follow.

To successfully challenge the Notice of Potential Liability, employers need to raise the “statutory defence” and provide proof that they have carried out necessary document checks on the right to work for that employee. A record of the appropriate documents must be held on the employee’s file. If the employer is unable to raise the statutory defence, they will be issued with a civil penalty. They will be given 28 days to pay the penalty in full, arrange with the UKBA to pay monthly instalments, or submit an objection to the UKBA against the service of the civil penalty or lodge an appeal against the service of the civil penalty to the County Court.

The size of the civil penalty depends on the type of eligibility checks that the employer has made on its workers and previous compliance or non-compliance with the UKBA legislation.

Employers within the agricultural sector should note that fines of up to £5,000 per worker can be made where non-exempt Bulgarian or Romanian employees are working illegally.

We would strongly recommend that employers seek advice before employing workers and carry out the necessary statutory checks which would provide a statutory defence. In particular, employers should check documents for all employees - current and new – and ensure they are available should the UKBA visit.

Birkett Long is offering a jargon free seminar on 28 June 2011, which will explain in simple and practical terms the background to the new illegal working provisions and will show, via case studies, how to manage risk, and cover the top 10 compliance tips. To register, contact Jennie Skingsley on 01206 217605 or visit www.birkettlong.co.uk