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Prevention of illegal working - new penalties for employers

29 February 2008
From 29 February 2008, the law regulating employers obligations to screen for illegal workers will change. Under the new regime, employers who employ workers illegally can be fined up to £10,000 for each illegally employed worker. They can be excused payment of the fine (though they have still committed an offence) if they can demonstrate that they checked the prospective employees right to work in the UK. This is similar to the previous statutory defence.

The Immigration, Asylum and Immigration Act 2006 ("the Act"):

  • Re-categorises documents employers must check and copy to establish the excuse
  • Introduces a new sliding scale for calculating fines
  • Empowers the Secretary of State to impose penalty notices requiring payment of a fine unless the employer responds by objecting to the penalty notice within a prescribed period (which the Government has helpfully not yet announced) or appeals within 28 days. The employer must then be able to demonstrate that they have checked and retained copies of the required documents. Even then, doing so only excuses payment of the fine - it is not a defence

What can employers do to avoid liability from 29 February?

In order to effectively challenge any penalty, employers will have to have brought themselves within the "statutory excuse" by demonstrating they have complied with the following procedure:

  • Before any new employee commences employment, an employer needs to undertake a check of approved documents (either from "List A" or "List B") for each prospective employee. The documents must be originals and not copies. The new list system governs the nature of checks required under the Act, and the extent to which an employer can be brought within the statutory excuse. This may have ramifications for the scale of any fine imposed.

The content of the new lists differs from those under previous regime. The list of approved documents from "List A" includes:

  • Full UK or European Economic Area (EEA) passport; or
  • Full British birth or adoption certificate which includes the name(s) of at least one of the holders parents and P45/P60. (A document showing only a temporary National Insurance number will not suffice)

The list of approved documents from "List B" includes:

  • A work permit or other approval to take employment issued by the Home Office or the Border and Immigration Agency, and either a passport or another travel document endorsed to show that the holder is allowed to stay in the United Kingdom and is allowed to do the work in question

Employers can obtain a full list of approved documents from the Border and Immigration Agency.

  • Employers must check the validity of the documents. They must satisfy themselves that the person presenting the document is the rightful holder and the documents are genuine, have not been tampered with and belong to the holder. Checks would include checking any photographs to ensure they are consistent with the appearance of the individual.
  • The employer must then take a copy of the relevant page or pages of the document(s) in a format that cannot be subsequently altered (e.g. a photocopy or scan (using Write Once Read Many software (WORM)). The employer must securely retain a copy of relevant documents.

Once checked and copied, "List A" documents entitle the employer to rely upon the statutory excuse for the duration of employment. "List B" documents require follow-up checks on the employee at least once every 12 months after the initial check. If employers do not carry out follow-up checks, they cannot rely on the statutory excuse (although the fact that a full initial check was carried out can be relied on to reduce any subsequent penalty).

Actual knowledge by an employer that an employee is not permitted to take up the work in question will prevent an employer relying upon the "statutory excuse" and the employer risks facing an unlimited fine and up to 2 years imprisonment.

Implications for TUPE transfers

Whilst the Act itself is silent on the obligations of employers who inherit employees on a TUPE transfer, the Border and Immigration Agency Code of Practice ("the Code") states:

"employers who acquire staff as a result of a Transfer of Undertakings (Protection of Employment) transfer are provided with a period of 28 days grace to undertake the appropriate document checks."

This obligation has serious implications for employers who acquire staff as a result of business acquisitions or service provision changes.

Transferees should ask the transferor whether the transferor is fully compliant with the checks procedure under the Act and consider requesting warranties and indemnities, particularly where the transferor is unable to provide requisite information and documentation relating to transferring employees right to work legally in the UK.

Avoiding unlawful discrimination

The Border and Immigration Agency has this month also published guidance for employers on avoiding unlawful discrimination in carrying out the requisite document checks. The Agency advises that employers make pre-recruitment checks in a non-discriminatory manner by applying checks to all job applicants and at the same point of the recruitment process.

A copy of the guidance and the Code can be found on the Border and Immigration Agency website: http://www.bia.homeoffice.gov.uk/

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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