Immigration civil penalty for employing illegal workers

If you are facing allegations of employing migrant workers illegally in the UK, you can be issued a civil penalty notice from the Home Office. Immigration civil penalties are substantial fines and as such, a serious matter that requires you to take action – whether you want to challenge the fine or to pay the fine within the required timeframes.

In this guide for employers, we explain what the civil penalty regime is and what your options are if you have received a fine for illegal working.

What is a civil penalty for illegal working?

If you employ someone without the right to undertake work in the UK or to do the job role on offer, you may incur a civil penalty of as much as £20,000 per illegal worker. You may be liable to pay a civil penalty for illegal working if you have failed to conduct a right to work check, either correctly or at all. It could also be either where you have carried out a check but you knew, or it was reasonably apparent, that the documentation was not genuine, this did not rightfully belong to the employee or the work on offer was not permitted.

If you are found by the Home Office to be employing a migrant worker illegally, and are unable to establish a statutory excuse by having previously carried out a prescribed right to work check, you may be issued with a Civil Penalty Notice. Under section 15(2) of the Immigration, Asylum and Nationality Act (IANA) 2006, this notice will set out the total amount that you are liable to pay and the date by which that payment must be made.

How much is a civil penalty for illegal working?

The Home Office is responsible for determining the amount of any civil penalty for illegal working for which you may be liable to pay. Assessed on a case-by-case basis, this will be calculated using a sliding scale, taking into account your history of compliance as an employer in respect of right to work checks and whether you qualify for a penalty reduction by providing evidence that you have met any or all of the following 3 mitigating factors:

• evidence of reporting suspected illegal workers: where there is proof that you have already reported the suspected illegal worker(s) to the Home Office
• evidence of active cooperation: where there is proof that you have actively co-operated with the Home Office throughout the investigation
• evidence of effective document checking practices: where there is proof that you have effective practices in place when it comes to checking employees’ right to work.

Illegal working fines prior to 2024

For a first breach in a 3-year period, the starting penalty will be £15,000 per illegal worker, before any reductions are applied, whilst for a second or subsequent breach, the starting point is £20,000. If any one of the first 2 mitigating factors apply, these will reduce any potential penalty by £5,000. If you are able to show that you have reported your suspicions about the illegal worker(s), actively co-operated with the Home Office ‘and’ have effective practices in place — and provided you have not been penalised for employing illegal workers within the last 3 years — the civil penalty will be reduced to a Warning Notice.

Illegal working fines from 2024

The UK Government announced in 2023 that it would be increasing the levels of civil penalties from 2024.

Under the new levels, employers can be fined up to £45,000 for a first breach, with the maximum civil penalty fine rising to £60,000. The fines are applied per illegal worker identified.

If you’ve received a civil penalty for illegal working: what are your options?

If you are found to be employing an illegal worker, and have been issued with a notice of a potential civil penalty, known as a Referral Notice, the details of your case will be referred for consideration under the civil penalty scheme in the context of any breach of the IANA.

The Referral Notice will explain how your case will be considered and the possible outcomes. It will also set out the date(s) on which the alleged breach was encountered. If you receive a Referral Notice, you are advised to consult “The employer’s guide to the administration of the civil penalty scheme”. Issued by the Home Office, this guidance sets out in detail how the civil penalty scheme is administered, including the different documents that you may receive and the deadlines relevant to each stage of the process.

Appeal or challenge the fine

The Home Office guidance also sets out how and when you may exercise the right to object to the imposition of a civil penalty for illegal working and also appeal to a court of law. You can object and appeal on the following grounds:

• you are not liable to pay the civil penalty, for example, because you are not actually the employer of the illegal worker(s) in question
• you have a statutory excuse, where you conducted a prescribed right to work check, or
• the amount of the penalty is too high, where this has been miscalculated or you can show that you have met certain mitigating criteria which has not been taken into account.

An objection must be raised within 28 days by filing an Objection Form and any additional evidence. This can result in a Warning Notice, the upholding of the civil penalty, a penalty reduction, an increased penalty or the cancellation of the penalty. In cases where an objection is denied, you can appeal to the County Court within 28 days.

If the Home Office visits your business premises and you are able to establish a statutory excuse in respect of the illegal workers identified, no further action will be taken. You will not be issued with a Referral Notice, but will instead be served with a No Action Notice. A No Action Notice will not have an adverse impact in the event of any subsequent penalty. Equally, if a Civil Penalty Notice is cancelled following an objection or appeal, and not replaced by a Warning Notice, this will not be taken into account for any future breaches.

Pay the fine

The amount you must pay and the final date for making payment will be set out in your Civil Penalty Notice. However, if you can pay the amount quickly, this may result in a discount. Equally, if you are struggling to pay, you may be able to pay by instalments.

Importantly, if you fail to pay your civil penalty in full, or object or appeal, by the specified due date, the penalty will be registered with the court, after which enforcement action may be immediately commenced. Equally, if you do not pay any instalment(s) on the agreed date(s), debt recovery enforcement action will again be taken.

How to pay civil penalty for illegal employment

The fast payment option

If you are able to make payment within 21 days of the date of your Civil Penalty Notice, the fast payment option will reduce the amount of your penalty by 30%. The reduced penalty amount and final date for making payment will be clearly shown in your notice.

If you object to the penalty before the deadline set out in your Civil Penalty Notice, you will still be eligible for the fast payment option. If, following your objection, you are required to pay a penalty, you will be issued with a fresh notice setting out a new date to pay your penalty at the lower amount. However, if you have previously been found to have employed illegal workers in the last 3 years, you will not be eligible to make a reduced payment.

Payment by instalments

If you cannot pay the civil penalty in a single lump sum, the Home Office may agree for you to pay your penalty by instalments instead, usually up to 24 months, although exceptionally as much as 36 months. However, in these circumstances, the penalty amount will not be reduced, where a fast payment option cannot be paid by instalments.

In order for any application to be considered, you must submit details of your ability to make payments over the instalment plan period, together with reasons as to why you cannot pay the full penalty within 28 days of the Civil Penalty Notice. Your request to pay by instalments will not affect the time limits for bringing an objection or an appeal.

Wider implications of immigration civil penalties

Employing illegal workers can have very serious consequences for both you and your business, including but not limited to sizeable immigration civil penalties. Your business and employer-brand will be at serious risk from reputational damage, where the government publishes a quarterly report, listing the penalties given to employers in different geographical areas across the country. The report sets out the name and address of each business, together with the final value of each civil penalty for illegal working.

The imposition of a civil penalty for illegal working can also lead to any sponsor licence that you may have being downgraded or revoked. It could also impact your ability to obtain a sponsor licence in the future and result in disqualification for any company directors. Equally, if enforcement action is taken in the county court for non-payment of a penalty, this could have an adverse impact on your ability to act as a director.

Most importantly, however, you may be liable to criminal prosecution if you knew, or had reasonable cause to believe, that an employee did not have permission to undertake work in the UK or to do the job on offer. The offence of knowingly employing an illegal migrant worker is punishable by up to 5 years’ imprisonment, an unlimited fine, or even both.

If you have found yourself facing a possible civil penalty for illegal working, you should immediately seek expert advice from an immigration specialist. Your legal advisor can also help you to put in place compliant working practices when it comes to right to work checks, in this way helping to reduce the risk of another civil penalty in the future.

How to avoid a civil penalty for illegal working

All employers have a responsibility to prevent illegal working by carrying out prescribed right to work checks on all prospective employees, prior to their employment commencing, as well as follow-up checks on any existing employees with a time-limited right to work in the UK.

By conducting a right to work check, and doing so in the correct way, this will minimise the risk of employing an illegal worker. Equally, where you can show that you have carried out a right to work check correctly, you may be able to establish a statutory excuse against civil liability if you are subsequently found to be employing someone illegally.

There are various different ways in which you can conduct a right to work check, primarily determined by the nationality of the employee in question.

For example, British and Irish nationals should provide their passport. This can be expired.

Foreign nationals should provide the employer with either a share code to be used as part of a digital check, or documentation from the Home Office list of acceptable documents for a manual check to prove their immigration status.

In instances where the employee cannot provide either their physical documents or online immigration status, you must ask the Home Office to check a prospective or existing employee’s immigration status using the Employer Checking Service. This could be because the employee has either an outstanding application, review or appeal with the Home Office, where you will be sent a Positive Verification Notice if that person has an ongoing right to work in the UK.

It is absolutely vital that any employer, especially one who has already been penalised for illegal working, complies with the prescribed procedures as set out in “The code of practice on preventing illegal working”. This is a statutory code which is frequently updated on how you may establish and retain a statutory excuse against liability for a civil penalty.

Immigration civil penalties FAQs

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Legal disclaimer

The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.