What employers need to know to avoid civil penalties.
All employers have a responsibility to check the rights of their employees to work in the UK, and failure to do so can lead to prosecution for a criminal offence and/ or a civil penalty of up to £20,000 per illegal worker. Full guidance for employers is available on the government website, here.
Employers can protect themselves against civil penalties by ensuring that they check and retain copies of specified documents as evidence of the individual's right to work. We consider below some of the key issues regarding right to work checks that employers need to keep in mind and highlight some key changes for European nationals in 2021.
Who needs a right to work check?
Right to work checks should be carried out for all employees who started work from 29 February 2008 onwards, regardless of their nationality.
Who is an 'employee'?
An 'employee' is anyone who works under an employment contract or contract for services or apprenticeship – essentially anyone who is not in business for themselves as an independent contractor. The semi-exception to this is agency workers or contractors where an agency or service provider is the employer, in which cases the agency or service provider have the responsibility to carry out checks.
However, in order to minimise reputational risks, employers would be well advised to ask any service providers or agencies they use for a copy of their right to work policies, and assurance that they make their own satisfactory checks, to provide some peace of mind.
The right to work check process
There are essentially two ways that employers can carry out checks.
- Physical checks – where the employer views original documents in the presence of the employee. The employer should check that the information on the document is accurate and matches the employee, whilst taking note of any expiry dates on entitlements to work.
Employers should take a signed and dated copy of these documents, which can be stored or dated electronically to show that the check was carried out on or before the first day of employment.
Important: temporary covid-19 concessions allow employers to perform physical checks via video calls (i.e. the document is held up by the employee to the camera for inspection), but the original documents should be checked as soon as possible. This relaxation of the rules will come to an end on 20 June 2021.
- Online checks - these can be used where an employee has a Biometric Residence Permit ('BRP') or has been granted an immigration status under the EU Settlement Scheme (i.e. they have pre-settled status or settled status).
Applicants will complete a form online which generates a right to work share code, which is then provided to the employer who can use it together with the applicant's date of birth to complete a form online. The employer will then be able to check whether or not the applicant has the right to work and if there are any conditions/expiry dates.
Important: online checks will be the only way to check EEA nationals' rights to work from 1 January 2021 as their Status Outcome Letters from the EU Settlement Scheme are not proof of right to work. It is also not necessary to re-do right to work checks of EEA nationals who commenced employment before 31 December 2020.
What is the process?
The process depends on the nationality of the individual:
- British or Irish national: the employer can take a copy of their passport or alternatively copies of birth certificates and an official document with their national insurance number (for example their P45)
- EEA/Swiss nationals can present their passport or national ID card to employers up until 1 July 2021, after which these individuals will need to provide the relevant codes so that the employer can perform an online check
- Non-EEA nationals will need to provide evidence of their immigration status (e.g. a BRP) or provide details (such as their online reference number) so that the employer can perform an online check
Timing of checks
Checks should be completed before employment commences. This can be done before the first day or as part of day one on-boarding procedures. It is acceptable to check an individual's right to work status at interview, but this must be done for everyone to avoid discriminating against applicants.
Follow-up checks should be carried out if individual's right to work has expired or to check it has been extended, either under a new permit or due to an application to extend their right to remain working in the UK.
Documentation and the 'statutory excuse'
If it is discovered that someone is working illegally the employer may be able to claim the 'statutory excuse' from a civil penalty, which means that they can show they obtained certain documents establishing the individual's right to work. When looking to adopt a statutory excuse it is important to understand that there are three categories of documents which each have an effect on the length of time the statutory excuse will apply.
'List A' documents provide an unlimited statutory excuse. 'List B1' documents provide a statutory excuse until the expiry date of the documents, and 'List B2' provides a statutory excuse for six months.
For detailed guidance, employers should consider having a copy of the up-to-date Home Office's Right to Work Checklist, which can be used for all employees with physical documents, which can be found here.
Students and the right to work
Most international students in higher education have some work rights. In many cases students will be able to work a certain number of hours a week during term-time with the number of hours printed on the front of their BRP (if they have one).
Students might be able to work full-time if they are outside of term-time or if they are taking part in a course-related placement, Employers should make a specific check on the student's working hours and obtain a letter from the student's school or University confirming term dates or the dates of their placement.
What should an employer do if the individual cannot provide documents?
If the individual cannot provide suitable documentation, a reference should be made to the Employer Checking Service at the Home Office. It is important to note that an online check is not the same as the Employer Checking Service.
For the purposes of Section 3(c) Immigration Act 1971, an existing right to work will continue beyond its expiry if an extension application is filed in time (i.e. before the expiry of the current visa).
Employers will need to ask the migrant's consent to file a request for the Home Office to check their records via an online form.
The Home Office will either confirm or not confirm that an application is pending and provide a statutory excuse for six months if an application is ongoing. If a decision has not been made on the application after six months, employers should re-submit the request to the Employer Checking Service.
What about civil penalties?
The first step of enforcement will usually be a letter/email from the Home Office requesting information about a particular employee and asking for a copy of the individual's right to work checks carried out by the employer.
The Home Office will then consider the employer's response and will either inform the employer that the employee is legally or illegally working. If the employee is illegally working, the employer will be expected to terminate the employment immediately. It is not enough to suspend an individual without pay.
If, on review, the Home Office decides that the right to work check carried out by the employer did not establish a statutory excuse, a civil penalty will be issued.
Reductions to the penalty
The Home Office starts at a fine of £20,000 per employee before applying mitigating factors. Those factors are as follows:
- First penalty in three years
- Self-reported illegal working
- Evidence of active co-operation
Each factor will apply a £5,000 deduction in the fine. First-time offenders may avoid a fine if they self-reported, actively co-operated and can show they have otherwise effective policies regarding right to work checks in place.
Other areas to be aware of
If employees are inherited by a transfer of undertakings, under the Transfer of Undertakings (Protection of Employment) Regulations 2006 ('TUPE'), then the benefit of right to work checks carried out by the previous employer will transfer to the new employer. However, if those checks have not been carried out, then the new employer cannot benefit from them, so it is important that due diligence exercises review the checks undertaken.
If right to work checks have not been done, or are found to be defective, the new employer must carry out a document check within 60 days from the date of the transfer to have a statutory excuse.
Practical points for employers
Employers need to have a right to work process and policy clearly set out.
In addition, it is also a good idea to state that all job offers are conditional on checks being carried out to the employer's satisfaction, and provide contractual obligations on employees to inform the employer of any changes which might affect their right to work in the UK.
In addition, it is a good idea to provide a contractual term which allows the employer to summarily terminate the employment if the employee loses the right to work. Employers who are considering terminating employment on the basis of the employee not having the right to work should take legal advice in order to help ensure that any dismissal is fair.
the Home Office requires right to work checks to be retained and kept for two years after the employment ends before it is destroyed. This should be clearly set out in an employer's data protection and privacy notice documentation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.