Illegal workers - what are the risks for employers?

23 June 2006

The issue of illegal immigration is never too far from the headlines. There has been publicity recently about individuals not legally entitled to live and work in the UK receiving National Insurance numbers from job centres. So what are the risks to employers of employing individuals not legally entitled to work in the UK?

Section 8 of the Asylum and Immigration Act 1996 makes it a criminal offence for an employer to employ someone over 16 years of age who has no right to work in the UK, or no right to do the work that is being offered. The offence carries a maximum fine of £5,000 per illegal employee. Criminal liability extends not just to an employer but also to any director, manager or other officer of the employer if the illegal employment occurred with their consent, connivance or as a result of their negligence.

What can employers do to avoid liability?

Section 8 of the Asylum and Immigration Act 1996 provides a defence for employers who are found to be employing an illegal worker. In order to rely on this defence, there are various steps that the employer must take:

1. Before any new employee commences employment, an employer needs to undertake a check of approved documents. Since 1 May 2004 the list of approved documents that employers need to check for each prospective employee includes:

· full UK or European Economic Area (EEA) passport; or

· full British birth certificate and a document issued by a previous employer (e.g. P45/P60) or Jobcentre Plus which contains the National insurance number of the person. (A document showing only a temporary National Insurance number will not suffice); or

· work permit and passport endorsed to show leave to enter or remain in the UK and permission to take the work permit employment in question.

Employers can obtain a list of approved documents from the Home Office.

2. Employers must also be reasonably satisfied that the prospective employee is the rightful holder of the documents provided. For example, is the photograph and date of birth on the document consistent with the appearance of the prospective employee?

3. Finally, an employer should make and retain a photocopy or scan (using Write Once Read Only software) of each document provided. Copies should be retained for the duration of the employee's employment and for three years thereafter.

Avoiding unlawful discrimination

On 6 April 2006, The Commission for Racial Equality published a revised Statutory Code of Practice on racial equality in employment.

This advises that: "Information about eligibility to work in the UK, which employers are required to obtain under the Asylum and Immigration Act 1996, should preferably be verified in the final stages of the selection process, to make sure the appointment is based on merit alone, and is not influenced by other factors."

The Home Office also has a code of practice for all employers in the avoidance of race discrimination in recruitment practice. This advises employers to ensure that they treat all applicants the same way at each stage of the recruitment process. Further points for employers to consider are:

· decide at which point of the recruitment process relevant documents will be requested and apply this consistently.

· do not request documents regarding applicants right to work in the UK only from individuals whose appearance or accent suggest they may be from an ethnic minority.

· if an applicant is unable to produce a document, do not assume that they are an illegal worker. Suggest that they seek further advice from a Citizen's Advice Bureau.

Data Protection

Requesting and retaining copies of an employee's documents may well amount to processing of "sensitive personal data" under the Data Protection Act 1998 and, if so, employers will need the employee's consent to process that data.

Further legislative changes just around the corner

The Immigration, Asylum and Nationality Act 2006 received Royal Assent on 30 March 2006. Sections 15 to 26 of the Act (not yet in force) will introduce new provisions to tackle illegal working. These include:

· a new civil penalty scheme for employers employing illegal employees;

· fixed penalty fines for employers (which it is proposed will be up to £2,000 per employee); and

· custodial sentences for employers who employ an individual "knowing that the employee is an adult subject to immigration control".

The Government has indicated the Act will be phased in over the next two years with full implementation not expected until 2008. The first provisions of the Act came into force on 16 June 2006.