Draft code on preventing illegal working: higher penalties, simpler right-to-work checks

7 May 14

UNITED KINGDOM

IMPACT – HIGH

What is the change? The U.K. Home Office has released a “draft code of practice on preventing illegal working” that updates rules regarding civil penalties on employers who employ undocumented workers.

What does the change mean? The draft code contains some sweeping changes to right-to-work checks required by employers and dramatically raises the maximum financial penalties for noncompliance.

  • Implementation timeframe: May 16.
  • Visas/permits affected: All visas and work permits.
  • Who is affected: All employers.
  • Impact on processing times: None.
  • Business impact: While many of the changes clarify and reduce the burden of document checks on employers, the increase to the maximum fines raises the stakes for employing workers illegally.
  • Next steps: Businesses should familiarize themselves with the draft code and new procedures for document checks.

Background: The draft code of practice for preventing illegal working details the Home Office’s civil-penalty scheme for employers and updates the code from February 2008. The draft code has been approved by the secretary of state and presented to Parliament.

These are the major changes:

  1. New methods of calculating fines. Under the draft code, the maximum starting penalties are £15,000 per worker for a first breach and £20,000 per worker for a second or repeat breach (up from a previous maximum of £10,000 per worker for repeat breaches). The new framework for civil penalties includes consideration of mitigating factors, such as cooperation with the Home Office and effective internal procedures.
  2. Fewer documents. The draft code reduces the list of acceptable documents an employer may check when inspecting employees’ right to work. Employers can establish a statutory excuse by checking these documents.
  3. Less frequent follow-up checks. Employers will not have to conduct follow-up checks as frequently for employees with temporary permission to be in the U.K. Under the new rules, they will generally only need to follow up when an employee’s work authorization expires (based on the validity period that appears on an employee’s documents during the employer’s initial check). Currently, employers must follow up every year.
  4. Longer grace period in TUPE situation. A longer grace period of 60 days will be allowed for employers conducting a right-to-work check of employees as a result of the Transfer of Undertakings (Protection of Employment) Regulations after acquisition of a company or business unit.

BAL Analysis: The changes in the draft code generally reduce the burden on employers in conducting right-to-work checks. In particular, the elimination of annual follow-up checks of employees on temporary stay visas will reduce administrative headaches for employers. However, the substantial hike in maximum penalties for employing workers illegally makes it critical for employers to correctly perform the checks and get their internal procedures in place.

This alert has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@balglobal.com.

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