As part of our family business campaign, we recently considered the basis of HR foundations as family or owner managed businesses grow. In our latest blog, we consider the importance of conducting right to work checks to ensure that employees have the right to work in the UK.
Good people within your business will be one of your most valuable assets but it’s important to ensure that every potential employee has the right to work in the UK. We understand that it can be tempting to take individuals at face value and to rely on recommendations or referrals, without undertaking checks to make sure that individuals are who they say they are.
But this is a dangerous approach. If you do not carry out the legally required document checks to establish that someone has the right to work for you before you employ them, your business could face significant fines and reputational damage. If, on the other hand, you actually know, or have reasonable cause to believe, that someone is working illegally you will be committing a criminal offence.
Legally, the consequences of employing illegal workers are significant and can impact the business in a number of ways. Possible sanctions include:
- A civil penalty fine imposed on the business of up to £20,000 per illegal worker;
- In serious cases, a criminal conviction for you personally, carrying a prison sentence of up to five years and an unlimited fine for your business;
- Closure of your business and a compliance order issued by the court;
- Disqualification from being able to act as a director, which means you will not be able to hold any directorships of any companies for as long as the disqualification lasts;
- Your business being prevented from sponsoring migrants – which means you will not be able to recruit talented individuals who might need a work permit to work for your business;
- Seizure of earnings made as a result of illegal working; and
- If you operate your business in the alcohol and late-night refreshment sector or the private hire vehicle and taxi sector, your licence to do this may be reviewed and even revoked.
Not only can the employment of illegal workers disrupt the operations of your business, but it could also result in irreparable reputational damage. The Home Office publishes the names of all businesses who have been issued fines for employing illegal workers, the number of illegal workers found and the value of the penalties that have been issued on a quarterly basis. This regularly attracts media attention.
In some circumstances, an illegal working penalty can impact your health and safety provisions, and/or your safeguarding obligations along with potentially invalidating your insurance. This is particularly the case where you have relied on employees being truthful as to their identity, qualifications or skill levels and these turn out not to be as claimed.
How can you protect you and your business?
You should ensure that legally compliant right to work checks are conducted for all employees before their employment begins. You must be satisfied that all potential employees (regardless of their ethnicity or nationality) are legally allowed to undertake the work in question for you. The check must happen before they commence employment, or the check will not be effective to protect you or your business should anyone later be found to be working illegally.
You should ensure that checks are conducted on all potential employees and not just those employed outside of your family or friends. This is to avoid any claims of discrimination on the basis of race, nationality or ethnicity because you have made assumptions about prospective employees based on their name, race, immigration status etc.
The responsibility for conducting right to work checks rests with your business as the employer and cannot be delegated. This means that legally you cannot rely on these checks being carried out by third parties such as recruitment agencies or ID verification companies (even if they have told you they can do this on your behalf).
If you do not carry out these checks in the proper way, you and your business will have no defence to any illegal working issues that might arise and will potentially face all of the consequences outlined above.
Advice and Support
We would recommend that you adopt a formal right to work process/policy when taking on staff, to make sure you and your business are protected from any penalties for employing someone illegally.
Our team of employment law and business immigration experts are very experienced in preparing and drafting policies to suit the needs of owner managed and/or family-owned businesses and helping you with any queries as/when they arise. We can help you address any existing issues by auditing your right to work checks, along with your employment contracts and policies to make sure that you can demonstrate compliance in this area, together with providing recommendations to allow you to safeguard the position of the business.
If you are interested in finding out more, please contact a member of the Employment or Immigration team or visit our dedicated Family Business page.
