UK: New Home Office Code on Preventing Illegal Working

The Home Office have released a new Code of Practice on the prevention of illegal working to update the original guidance issued in February 2008. It came into effect on 16th May 2014 and includes, most notably an increase to the financial penalty from £10,000 to £20,000 per illegal worker. We outline the main changes below:

Repeat right to work checks

According to the new code, it is no longer necessary to do repeat right to work checks on employees with limited leave to remain on an annual basis.

If the right to work check was carried out correctly before the employment began and acceptable documents were presented to the employer, the employer will have the benefit of a”statutory excuse” against a civil penalty.

Depending on the type of document produced, one of the following will be established: a continuous statutory excuse; a time-limited statutory excuse that covers the full period of the employee”s leave to remain; or a time-limited statutory excuse that lasts for 6 months.

With a continuous statutory excuse, the right to work check need only be done once, prior to the start of employment. The type of documents that establish a continuous statutory excuse include (but are not limited to) a UK passport, an EEA/Swiss passport/ ID Card, a BRP showing the holder has Indefinite Leave to Remain in the UK, a UK Birth Certificate or a certificate of naturalisation as a British Citizen.

With a time-limited statutory excuse, a follow-up check will only have to be repeated when the person”s leave is due to expire to confirm that they have extended it or are in the process of doing so (in which case the excuse continues for 28 days beyond the initial leave expiry date). Documents that establish a time-limited statutory excuse include a BRP/passport that confirms that the employee is entitled to carry out the work in question for a specific period of time or a Residence Card confirming that the holder is a non-EEA family member of an EEA national.

With a time-limited statutory excuse for 6 months, the check will need to be done again after the 6 months have elapsed. The documents that establish this type of excuse include a Certificate of Application issued by the Home Office stating that the holder is a family member of a national of an EEA country/Switzerland and they are only permitted to take employment which is less than 6 months.

Changes in how to conduct a right to work check

The employer will still need to view original documents, check the documents in the presence of the holder and take copies of these documents with the date that the right to work check was carried out. However, there is a new provision in the code that the right to work check may now be done via live video link. Additionally, it is a no longer stipulated that you have to copy the front cover of passport and the guidance also confirms that right to work check documents must be kept on file for the duration of the employee”s employment plus an additional 2 years thereafter.

Student workers

Employers will now be required to obtain and retain a copy of evidence from the student”s educational sponsor stating the term and vacation times and the duration of their period of study in the UK.  It is vital that where a student has a restriction on the number of hours that they are permitted to work during term time, that these hours are adhered to.

Extension to the grace period for employees acquired as a result of the TUPE Regulations

Employers who acquire staff as a result of a TUPE transfer are now provided with a grace period of 60 days from the date of the transfer of the business to carry out the right to work checks in respect of these new employees.

Changes to Calculating Civil Penalty Levels

The starting point for determining the civil penalty to be applied is whether the employer has been found to be employing illegal workers within the previous 3 years.

If the employer has been found to have been employing illegal workers within the last 3 years, the starting penalty will be £20,000. If the employer has not been found to have been employing illegal workers within the last 3 years, the penalty will be £15,000.

From this point, mitigating factors will be applied. If the employer has not been found to be employing illegal workers within the last 3 years and they can show that they have effective systems in place relating to right to work checks, they will usually just receive a warning notice. Other mitigating factors include evidence of previously having reported suspected illegal workers and evidence of co-operation with the Home Office. Successfully demonstrating evidence of each of these factors will reduce the total penalty by £5,000.

It is also useful to note that there is also a Fast Payment option which reduces the penalty by 30%, as well as the option to pay any penalty in instalments.

Action for UK employers

Where you have internal policies in place with regards to recruitment/HR/immigration it is advisable to undertake a review of such policies as soon as possible in order ensure that any changes introduced by the Code are reflected in your policy documents.  Newland Chase can offer this service, so if you have any questions or require assistance please contact us on 0207 0012121.

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