Civil Penalty

Major consequences of a civil penalty for illegal employment

Financial penalty – in 2014, the maximum fine was increased from £10,000 to £20,000 for every illegal worker. Although the fines can be mitigated by certain factors, where an employer has employed several illegal workers, the resulting fines can be financially crippling.

Immigration applications – a civil penalty will be recorded on the Home Office systems. Where the employer is subject to immigration control, civil penalties can be taken into account when considering whether any future immigration applications should be refused on the basis of poor character, conduct, and associations.

Points-based system licence – a civil penalty will impact on an employer’s ability to apply for a sponsor licence under the PBS, and depending on whether the penalty was set at the maximum amount and when it was paid, it can lead to a mandatory refusal of a sponsor licence for a period of six to 12 months. It will also lead to the revocation of an employer’s sponsor licence if the amount payable for at least one worker stands at the maximum amount.

Publication of breaches – the Home Office publishes the details of civil penalties on its website each quarter. This could potentially damage the reputation and brand image built by a business over many years.

Revocation of business licences – although employing illegal workers was not the only offence in the case of East Lindsey District Council v Abu Hanif (t/a Zara’s Restaurant and Takeaway), employers should bear in mind that, even in the absence of a criminal conviction, breaches of immigration rules could lead to the loss of their business. In this case, the High Court ordered that the restaurant’s alcohol and late hours licence be revoked following the receipt of a civil penalty for employing illegal workers.

Disqualification of company directors – if a civil penalty becomes overdue and the Home Office is forced to commence enforcement action to recover the debt, this will adversely affect an individual’s ability to obtain credit in the future or to act in the capacity of a director in a company.

The best way to avoid civil penalties is to ensure that you have adequate documentation proving the employee’s right to work in the UK. Make sure that you have legitimate copies of documents like passports, work visas, biometric residence cards, birth certificates or certificates of naturalisation are adequate proof of right of work. Remember that all documents should be current and explicitly state the person’s right to work in the UK.

Be honest and accurate about the details of the position you are extending to foreign workers. If it is accurate to the job you are giving to a foreign worker, then you are unlikely to receive a Civil Penalty.

Another way to avoid civil penalties is to be prompt in sending a statutory excuse to the Home Office. Promptness in responding to the Information Request will help you to avoid the Home Office increasing your penalty.

Promptness in objecting or appealing a decision the Home Office makes increases your chance of getting your penalty changed or reduced. Ensuring you understand and use the most fitting grounds for appeal will also increase your success.

Regarding payment, using the fast payment option can reduce the burden of payment. If it isn’t an option, remember that you only have 28 days to request a payment by installment plan.