Draft Legislation – Increased Civil Penalties – Illegal Workers and Right to Rent Checks

With a view to enhancing the deterrents to illegal migration to the UK, the former Home Secretary announced plans in August 2023 to increase civil penalties against employers for instances of illegal working. The government has now released draft legislation relating to these proposed increases, with the expectation that they will be implemented in January 2024.

A civil penalty is imposed against employers and landlords who employ or rent properties to individuals who do not have the correct immigration status to work or rent in the UK. Failure to conduct a compliant check can result in a high financial penalty. Conducting proper and fully compliant checks will form a statutory excuse and therefore avoid sanctions. Current guidance on carrying out checks can be found at: Legal Right to Work Checks. The applicable fines from 2024 are set out below:

Employers

• First breach – up to £45,000 per worker (currently up to £15,000)
• Repeat breach – up to £60,000 per worker (currently up to £20,000)

Landlords (including letting agents)

• First breach:
  • up to £5,000 per lodger (currently up to £80)
  • up to £10,000 per occupier (currently up to £1,000)
• Repeat breach (within 3 years):
  • up to £10,000 per lodger (currently up to £500)
  • up to £20,000 per occupier (currently up to £3,000)

Alongside these civil penalties, employers can face a number of other sanctions, including:

• in serious cases, a criminal conviction carrying a prison sentence of up to five years and an unlimited fine
• closure of the business and a compliance order issued by the court
• disqualification as a director for directors of companies where illegal working is identified
• seizure of earnings made via illegal working
• revocation of a licence in the alcohol and late-night refreshment sector and the private hire vehicle and taxi sector

What to do next?

Employers and landlords must conduct the relevant right to work and rent checks indiscriminately to obtain a statutory excuse against liability for a civil penalty and ensure that the checks are properly recorded and retained for the necessary length of time. For right to work documentation, the documents must be retained for least 2-years following the end of employment.

It is recommended that employers routinely conduct an internal audit of their HR files to ensure ongoing compliance with illegal working safeguards.

If you require any further guidance on how to conduct the relevant checks, to organise training for your team or assistance with a more comprehensive audit of your HR files, please contact your representative at Magrath Sheldrick LLP for further information, or email us at [email protected].

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