Immigration changes from 16 May 2014 – what do employers need to know?

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On 16 May 2014:

  • the maximum civil penalty for employing an illegal worker increased from £10,000 to £20,000
  • a new statutory code of practice on preventing illegal working came into effect
  • a new statutory code of practice on avoiding unlawful discrimination while preventing illegal working came into effect.

The Civil Penalty

  • Negligently employing an illegal worker carries civil liability. The maximum civil penalty is now £20,000.
  • Knowingly employing an illegal worker is a criminal offence carrying a penalty of up to two years’ imprisonment and/or an unlimited fine.
  • The level of civil penalty will depend on whether the employer is committing an offence for the first time or whether it has committed an offence within the previous three years. The new code of practice sets out a ‘consideration framework’ and ‘penalty calculator’, which explain how different factors are likely to lead to different tariffs.
  • An employer is excused from paying a civil penalty if it can show that it complied with the prescribed requirements for checking right to work documents before the employment began.
  • A partial right to work check will no longer be a mitigating factor when calculating the civil penalty for employing an illegal worker.
  • The following may be used as mitigating factors:
    – it is a first offence
    – the employer reported suspected illegality
    – the employer co-operated with a Home Office investigation
    – the employer has effective document checking practices in place.

The Code of Practice on preventing illegal working
The new statutory code of practice on preventing illegal working replaces an existing code and will apply where the person was employed on or after 29 February 2008 and the breach occurred on or after 16 May 2014 (if the breach occurred before that date, the old code applies).

Key points to note from the code of practice are:

  • the code sets out guidance on the factors that will be considered by the Home Office when determining a civil penalty for employing an illegal worker (as referred to under ‘The Civil Penalty’ above)
  • the range of documents that is acceptable for the purposes of right to work checks has been reduced. Travel documents, work permits and general Home Office letters have been removed from the list
  • one major change relates to the requirement to check documents for those with a temporary right to work in the UK. Previously, in respect of such workers, employers had been required to check the employee’s documents before they started employment and to repeat the check every 12 months. The new code confirms that the requirement to repeat the check will be linked to the expiry of the right to work document. In other words, the requirement on employers to check the documents every 12 months has been removed. This will greatly reduce the administrative burden on employers
  • students from overseas are usually granted Tier 4 student permission to study in the UK. Depending on when the permission was granted and the course they are undertaking, they may have the right to work in the UK (this is usually limited to 10-20 hours per week during term time and full time during vacations, provided the student is not employed in a full-time, permanent role). The new code will require employers to request and retain a copy of the student timetable showing evidence of the student’s academic and vacation times as additional evidence that the student is not working in breach of their permission
    the code provides that an employer will have a “grace period” of 60 days to carry out up to date right to work checks following a TUPE transfer. This is an increase from 28 days under the previous code of practice.

The Code of Practice on avoiding unlawful discrimination while preventing illegal working
This code of practice does what it says on the can – it explains how to avoid race discrimination when complying with the duty to carry out pre-employment immigration checks. Key points to note are:

  • if an employer only carries out right to work checks on people who they believe are not British citizens (for example, on the basis of the person’s colour, accent, race, ethnic or national origins) this could amount to unlawful race discrimination under the Equality Act 2010
  • it goes without saying that many people from ethnic minorities are British citizens and many non-British citizens are entitled to work in the UK. Employers should not assume that someone does not have the right to work in the UK without evidence
  • employers should therefore obtain right to work documents for all prospective workers thus demonstrating a consistent, transparent and non-discriminatory recruitment process
  • the provisions of the Equality Act apply to all employers regardless of size and resources. No allowances will be made by the Employment Tribunal in a race discrimination claim for employers who, for example, discriminated because they were unaware of the law or because they did not have an HR function to guide them
  • it is likely to be unlawful discrimination to treat someone less favourably or give them less favourable terms of employment because they have time-limited permission to be in the UK
    it is likely to be unlawful discrimination to treat someone less favourably because of an assumption that their overseas qualifications or experience are inferior to qualifications or experience gained in the UK.
  • if a prospective worker cannot produce right to work documents the employer should not assume they are living or working illegally in the UK. The employer should try to keep the job open as long as is reasonably possible to allow the individual time to demonstrate their right to work but is not required to do so if they need someone to start urgently.
  • employers should ensure they carry out effective equal opportunities monitoring during their recruitment processes.

Bear in mind that where an employer is found to have committed an act of unlawful race discrimination the Public Procurement Regulations 2006 provide that Public Authorities may disqualify them from entering into public procurement contracts.

All employers, without exception, have a legal duty to prevent illegal working. The Immigration, Asylum and Nationality Act 2006 sets out a complex framework for employers to follow when recruiting and employing staff. It can be very costly to fall foul of the requirements and can affect the employer’s ability to sponsor migrants who come to the UK to work in the future. It is therefore worth taking the time to make sure your organisation is operating in line with the legal framework and the new codes of practice.

It is especially important for those employers who have taken on new staff following a TUPE transfer to ensure that renewed right to work checks are carried out within the requisite 60-day period.

Walker Morris Solicitors regularly advise employers on the legal requirements in this area and on business immigration matters generally. We would be happy to help with any queries. Please contact Shabana Muneer.