Right to work checks have been a cornerstone of effective recruitment practices in the UK since 2008. They are also a key element of the Government’s ongoing strategy to prevent illegal working in the UK, with the potential for significant fines to be imposed against employers who employ staff illegally. In a move focused on targeting illegal working in the “gig economy” – digital platforms providing short-term, freelance work on a non-employment basis – the Government has recently proposed a significant expansion of the existing right to work check regime.
The rationale behind the regime
All employers in the UK have a duty to prevent illegal working. Key elements of the law on preventing illegal working are contained in the Immigration, Asylum and Nationality Act 2006 (the 2006 Act). Section 15 of the 2006 Act makes it an offence to employ someone who does not have the right to carry out the work in question. There is also a more serious criminal offence contained in s21, where an employer knows or has reasonable cause to believe that they are employing an illegal worker.
The main benefit to employers in carrying out a right to work check as per Home Office guidance is that they will secure a “statutory excuse” against civil penalties for illegal working. In other words, (i) if the Home Office audit an employer and identify an individual as working illegally, but (ii) the employer can prove to the Home Office that they have a statutory excuse concerning that individual, then the employer would be exempt from the requirement to pay a civil penalty.
It is important to note that there is no standalone penalty for failing to perform a right to work check. However, conducting a check that complies with Home Office requirements is the only way to secure a statutory excuse. If an employer fails to carry out a check, they are therefore unnecessarily risking significant penalties, business disruption and reputational damage.
What are the penalties?
Civil penalties can be as high as £60,000 per illegal worker. In practice, the maximum fine for a first breach is £45,000 per illegal worker, with the headline figure of £60,000 per illegal worker being triggered for repeated failures by employers. In some cases, there are means by which employers can reduce these penalties, complying with Home Office investigations being one of them.
In s21 criminal cases, a criminal conviction can result in an unlimited fine and also up to 5 years imprisonment.
The Home Office also has other powers, including the ability to close businesses, disqualify directors, prevent an organisation from sponsoring migrant workers, as well as the power to revoke liquor licences. Those who employ illegal workers can also be “named and shamed” on the Government website.
Who should be checked as things stand?
Current Home Office guidance confirms that the checks apply to “employers who employ staff under a contract of employment, service or apprenticeship, whether express or implied and whether oral or in writing”. It goes on to say that where a “worker is not your direct employee (for example, if they’re self-employed), you are not required to establish a statutory excuse”. Although checks on non-employees are not currently required, there are nevertheless several reasons why organisations may wish to carry out checks on such individuals – including to mitigate risks relating to business disruption, reputational damage and insurance protection.
For a statutory excuse to be established for a new hire, a compliant check must be conducted before the individual is employed. For some visa holders, there is an ongoing checking requirement for the statutory excuse to be maintained.
Under the Equality Act 2010, employers must not discriminate in recruitment processes. Employers should therefore conduct checks fairly across the board for all new hires. They should not, for example, choose who to check based on assumptions related to race, ethnicity and/or national origin. Anyone who believes that they have been discriminated against in a recruitment process has the right to raise a claim before an Employment Tribunal – although pre-employment claims related to recruitment are rare in practice.
What is the Government proposing?
The Government recently announced the proposed expansion of the current right to work checking regime to “gig economy and zero-hours workers in sectors like construction, food delivery, beauty salons and courier services”.
This would significantly widen the scope of the current rules, making it a legal requirement to conduct checks for non-employees in a manner that is not currently required.
Whilst the Government’s announcement points out that some high-profile businesses in the gig economy sector already carry out such checks voluntarily, other organisations do not. It is generally accepted that most gig economy workers do not hold employee status and the absence of right to work check requirements has been area of concern from an illegal working standpoint for some time.
Although the Government’s announcement expressly refers to a number of sectors where zero-hours and casual arrangements are particularly prevalent, the expectation is that the proposals would be rolled out to all types of flexible work arrangements that fall short of full employment status – including workers and casual zero-hours staff. It is not expected that the proposals will be limited to certain sectors or types of working arrangements.
The announcement gave no timeline for the implementation of the proposals. However, this will be one of many changes that employers can expect during this current parliamentary term as the Employment Rights Bill progresses through Parliament in the coming months.
Top tips for employers
- Check Home Office guidance: This is regularly maintained and updated online and sets out the up-to-date position on checks. Printed versions of the guidance should not be used without first checking that it matches the current version of the guidance online.
- Understand the correct type of check to be conducted: There are a variety of different ways that checks can be carried out, with some being mandatory for certain categories of individuals. It is essential that the correct type of check is conducted.
- Know where check records are held: Records of right to work checks should be securely stored during an individual’s employment and for 2 years afterwards. A sufficient number of individuals within an organisation should know how to access these quickly in the event of an unannounced Home Office check.
- Consider the scope of current checks: Organisations who currently only check employees, and not casual workers, may wish to consider widening the scope of their checking programme in advance of the new rules being implemented. As noted above, there are a number of sound business reasons for organisations to check these individuals even if such checks are not legally required at present.
- Take advice: Immigration compliance is a tricky business and there are significant costs associated with getting it wrong. Taking advice at an early stage is strongly recommended.
If you would like to discuss your own circumstances or find out more about right to work checks, get in touch with Fraser or a member of our expert Employment Law team.
