Legal Briefing

Changes to codes of practice on prevention of illegal working

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Human resources | 01 June 2014

Two new codes of practice for employers came into effect on 16 May 2014, relating to the prevention of illegal working and avoiding unlawful discrimination in the legal right to work checking process.


The Code of Practice on Preventing Illegal Working (the Code) follows a consultation launched by the government in July 2013 and updates the code issued in February 2008. It sets out the factors to be considered by the Home Office in determining the amount of a civil penalty.

The Code applies where employment commenced on or after 29 February 2008 and an initial or repeat check was required, or where a breach occurred on or after 16 May 2014. Where the employment commenced on or after 29 February 2008 and the breach occurred before 16 May 2014, the code published in February 2008 applies.

CIVIL PENALTIES AND MITIGATION

The maximum civil penalty has increased from £10,000 for each illegal worker employed to £15,000 for a first breach, and to £20,000 for a repeat breach within the subsequent three-year period. In either case, the following two new mitigating factors have been introduced which, if enacted, may lead to a £5,000 reduction in the civil penalty issued:

  1. reporting the suspected illegal worker to the Home Office employers’ helpline; and
  2. active co-operation in the Home Office investigation.

In the event of a first breach, provided both mitigating factors have been met, if the employer has effective document checking practices in place and generally complies with their employer duties to prevent illegal working, the Home Office may issue a warning notice rather than a civil penalty. For a repeat breach within any subsequent three-year period, a civil penalty is more likely to be issued.

The employer will be considered to have effective document checking practices in place where they have:

  • robust document checking systems in place;
  • thorough and consistent document checking processes;
  • records of document checks for their staff; and
  • a history of compliance with the requirements.

In the event of a first breach within a three-year period, the fine may be reduced by a further 30% (previously 20%) if the penalty imposed is paid within 21 days (known as the ‘fast payment option’). In the event of a repeat breach within a three-year period this option is not available.

In addition, the maximum fine for employers paying salaries below the national minimum wage has increased from £5,000 to £20,000. The government intends to publish the names of any businesses that have failed to pay the minimum wage.

Under the new regulations, employers who knowingly employ illegal workers can be imprisoned for up to two years and there is no cap on the financial penalty that can be issued for such employers.

REPEAT RIGHT TO WORK CHECKS

It is no longer a requirement to complete right to work checks on employees with temporary permission to remain in the UK every 12 months. Once this permission expires, the employer must be reasonably satisfied that the employee has an outstanding leave to remain application or appeal (which was submitted prior to the expiry date of their visa). The employer must contact the employer checking service and receive a positive verification notice confirming the employee continues to have the right to undertake the work in question within 28 days of the visa expiry date. The positive verification notice will last for six months, within which time a further check is required.

PERMITTED DOCUMENTS

The Home Office has reduced the list of documents that can be accepted to prove an individual’s legal right to work in the UK. In particular, it is no longer acceptable for the employee to provide a letter issued by the Home Office indicating their permission to stay, together with an official document issued by a previous employer or government agency.

In addition, employers hiring students are now required to retain a copy of the documentary evidence obtained from 
the student’s education sponsor which confirms the study term and vacation dates during the period for which the student will be employed.

Employers hiring individuals as a result of the Transfer of Undertakings (Protection of Employment) Regulations are now provided with a grace period of 60 days from the date of transfer to conduct right to work checks for these employees.

PRACTICAL STEPS

Employers should make the following changes to document checking systems and processes:

1. Take the following steps to replace all scheduled repeat annual checks with follow-up checks for employees with temporary permission to remain:

  • Diarise to connect with the employee three months and one month prior to the expiry date of their current permission to remain in the UK to enquire as to the steps they are taking to extend their permission.
  • Diarise to carry out a repeat right 
to work check one week prior to 
the current expiry of permission 
to remain.
  • Keep a note on file of the type 
of application the employee 
expects to make and the estimated processing time.
  • Request that the employee keeps HR informed of the progress of 
their application for further leave 
to remain/appeal.
  • Where the employee’s further leave to remain is unlikely to be extended prior to the expiry of their current permission to remain in the UK, diarise to contact the employer checking service on the day after the expiry of the employee’s permission.
  • Cancel/delete any prior reminders to carry out repeat annual checks.

2. Review standard offer letters and employment contracts to assess whether any amendments are required to reflect the changes. In particular, where document Lists A and B are included, replace these with the revised versions.
3. Review any checklists or processes in place to require potential student employees to provide evidence from their sponsor prior to the start of employment, setting out their term and vacation dates for the duration of their period of study in the UK for which they will be employed.

Employers are responsible for preventing illegal working in the UK by ensuring that all employees have the correct right to work here. By following the Home Office guidelines on how to carry out right to work checks, the employment of illegal workers will be prevented and the risks of a civil penalty being issued for non-compliance 
will be minimised.

RIGHT TO WORK CHECKS: 
A PRACTICE NOTE

Employees with permanent rights to work in the UK (List A)

One of the following documents must be checked and a copy retained by the employer prior to the commencement of employment (no further checks will be necessary for duration of employment):

  1. A passport showing the holder, or a person named in the passport as the child of the holder, is a British citizen or a citizen of the UK and colonies having the right of abode in the UK.
  2. A passport or national identity card showing the holder, or a person named in the passport as the child of the holder, is a national of a European Economic Area country or Switzerland.
  3. A registration certificate or document certifying permanent residence issued by the Home Office to a national of a European Economic Area country or Switzerland.
  4. A permanent residence card issued by the Home Office to the family member of a national of a European Economic Area country or Switzerland.
  5. A current biometric immigration document (biometric residence permit) issued by the Home Office to the holder indicating that the person named is allowed to stay indefinitely in the UK, or has no time limit on their stay in the UK.
  6. A current passport endorsed to show that the holder is exempt from immigration control, is allowed to stay indefinitely in the UK, has the right of abode in the UK, or has no time limit on their stay in the UK.
  7. A current immigration status document issued by the Home Office to the holder with an endorsement indicating that the named person is allowed to stay indefinitely in the UK, or has no time limit on their stay in the UK, together with an official document giving the person’s permanent National Insurance number and their name issued by a government agency or a previous employer.
  8. A full birth or adoption certificate issued in the UK which includes the name(s) of at least one of the holder’s parents or adoptive parents, together with an official document giving the person’s permanent National Insurance number and their name issued by a government agency or a previous employer.
  9. A birth or adoption certificate issued in the Channel Islands, the Isle of Man or Ireland, together with an official document giving the person’s permanent National Insurance number and their name issued by a government agency or a previous employer.
  10. A certificate of registration or naturalisation as a British citizen, together with an official document giving the person’s permanent National Insurance number and their name issued by a government agency or a previous employer.
Employees with temporary rights to work in the UK (List B)

One of the following documents must be checked and a copy retained by the employer prior to the commencement of employment:

Group 1: repeated checks are necessary 
at the expiry date of the document
  1. A current passport endorsed to show that the holder is allowed to stay in the UK and is currently allowed to do the type of work in question.
  2. A current biometric immigration document (biometric residence permit) issued by the Home Office to the holder which indicates that the named person can currently stay in the UK and is allowed to do the work in question.
  3. A current residence card (including 
n accession residence card or a derivative residence card) issued by the Home Office to a non-European Economic Area national who is a family member of a national of a European Economic Area country or Switzerland, or who has a derivative right of residence.
  4. A current immigration status document containing a photograph issued by the Home Office to the holder with a valid endorsement indicating that the named person may stay in the UK, and is allowed to do the type of work in question, together with an official document giving the person’s permanent National Insurance number and their name issued by a government agency or a previous employer.
Upon expiry

At the point the permission expires, the employer must be reasonably satisfied that the employee has an outstanding application or appeal to vary or extend their leave in the UK. The employer must contact the employer checking service within 28 days of the expiry date, and receive a positive verification notice confirming the employee continues 
to have the right to undertake the 
work in question.

Group 2: repeated checks are necessary every six months
  1. A certificate of application issued by the Home Office under regulation 17(3) or 18A(2) of the Immigration (European Economic Area) Regulations 2006 to a family member of a national of a European Economic Area country or Switzerland stating that the holder is permitted to take employment which is less than six months old, together with a positive verification notice from the Home Office employer checking service.
  2. An application registration card issued by the Home Office stating 
that the holder is permitted to take 
the employment in question, together with a positive verification notice 
from the Home Office employer checking service.
  3. A positive verification notice issued by the Home Office employer checking service to the employer or prospective employer which indicates that the named person may stay in the UK and is permitted to do the work in question.

NB: A positive verification notice can be obtained by sending a completed enquiry form to the employer checking service to employercheckingservice@homeoffice.gsi.gov.uk. The form can be downloaded via the following web-link: https://www.gov.uk/government/publications/employer-checking-service-form-check-employees-right-to-work.