North East Business owners hit with Home Office penalties

The Immigration, Asylum and Nationality Act 2006 allows the Secretary of State to serve an employer with a civil penalty where they are found to have been employing someone illegally.

In 2014 the maximum civil penalty for employing someone illegally was doubled by the Government. The maximum penalty is now £15,000, or £20,000 if an employer has previously been found to have employed someone illegally in the last 3 years. The penalty is multiplied by how many workers have been illegally employed, so 4 illegal workers will see an employer hit with a fine of £60,000.

The latest Home Office figures show that between 1st October and 31st December 2017, 51 different penalties were awarded to employers in the North East alone in relation to 72 illegal workers, leading to an overall fine in the region of £870,000.

https://www.gov.uk/government/publications/illegal-working-penalties-quarterly-totals

The penalty for employing someone illegally could be catastrophic for any small business and underlines the importance for employers to carry out right to work checks to ensure that all workers have the right to work in the UK and be able to enable a statutory defence to a civil penalty. An employer can do this by checking, taking and retaining copies of an individual’s passport and utilising the GOV.UK document checking service, the government website has a useful Employer’s guide to work checks.

In our experience, if an employer is served with notice of a civil penalty, there is a very small chance of successfully overturning the penalty and establishing innocence. The broad definition of employment often makes it very difficult.

Further, our experience shows that when pursued to Court, a Judge will as a starting point side with the Home Office and allow the defendant employer to attempt to prove their innocence. This mind-set makes what is already an uphill battle even tougher.

Our experience shows it is more sensible and cost effective to negotiate with the Home Office as early as possible. A legal advisor can utilise mitigating factors set out in the Home Office code of practice to reduce a penalty where possible.

Examples of mitigating factors include:

  1. Evidence of reporting suspected illegal workers
  2. Evidence of active co-operation
  3. Evidence of effective document checking

Fulfillment of at least 2 of these criteria could allow for a £10,000 deduction to the civil penalty. That, coupled with the faster payment option which provides a 30% reduction, can result in a fine being reduced from £15,000 to £3,500.

Further, in our experience the Home Office are often open to payment plans. Negotiating a respectable payment plan can often be the difference between a business staying open or having to close its doors.

Our experience shows the Home Office are open to extending payment plans for 36 months but not for any longer period. Whether the Home Office choose to offer a payment plan depends on the case itself and applicability of mitigating factors.

The information provided above shows that it is important to seek legal advice as soon as notice of a civil penalty is received. The benefits of doing so are that a legal advisor can look to establish a defence to the penalty or negotiate a significant reduction and payment plan which could be the difference between an employer staying in business or having to close their business down.

It is important for an employer to check someone’s right to work in the UK to avoid a civil penalty. If you would like advise on immigration matters please contact us on 0191 232 9547.