Labor market enforcement provisions to take effect Nov. 25

4 Nov 16

UNITED KINGDOM

IMPACT – HIGH

What is the change? As the phased rollout of the Immigration Act 2016 continues, labor market enforcement provisions will take effect on Nov. 25 and Right to Rent provisions on Dec. 1.

What does the change mean? The definition of illegal hiring has been broadened, making it easier for U.K. employers to be found in violation of hiring illegal workers and be subject to higher criminal and commercial penalties, including closure of their business. The U.K. may become a more hostile environment for migrants generally, with increased administrative hurdles when seeking to rent property, open bank accounts or secure driving licenses.

  • Implementation time frame: Nov. 25 and Dec. 1.
  • Visas/permits affected: All visas and leave to remain.
  • Who is affected: U.K. employers, foreign nationals in the U.K., landlords providing accommodation in the U.K.
  • Business impact: The Act makes it a crime to hire migrant workers where an employer has “reasonable cause to believe that the employee is disqualified from employment. It is no longer necessary for an employer to have actual knowledge of illegal working to be found liable. Businesses that violate illegal working provisions continue to face fines of £20,000 (about US$25,000) per illegal worker and possible loss of their sponsor’s license.
  • Next steps: Employers should review their current Right to Work check policy so that all human resources staff are aware of the risks and responsibilities. Any global mobility teams handling accommodations should be fully aware of the new Right to Rent regime for landlords, as well as rules for banks, and should provide support to assignees in proving their immigration status prior to seeking  rental agreements.

Below are some of the key provisions that relate to illegal working and restricting undocumented workers’ access to services:

Illegal Working

  • A new position, director of labor market enforcement, will oversee enforcement of worker exploitation, as well as a continued focus on controlling illegal working.
  • Employers can more easily be found criminally liable for hiring undocumented workers as employers no longer need to have actual knowledge of illegal hiring, and can also be liable where there is “reasonable cause to believe that the employee is disqualified from employment.”
  • Criminal penalties for employing illegal workers is increased from two years to five years, along with a potentially unlimited fine, in addition to civil fines of up to £20,000 per illegal worker.
  • Businesses can be ordered to shut down for up to 48 hours while any illegal working situation is resolved.
  • Migrant workers who take up work without permission now may be sentenced to up to six months in jail and ordered to pay monetary fines.
  • A new penalty has been introduced allowing authorities to seize the earnings of illegal workers as proceeds of a crime.

Right to Rent and registration checks

The Immigration Act restricts illegal migrants’ access to services, including the ability to rent a residential property. The “Right to Rent” regime, which is detailed here, requires landlords to obtain proof of a tenant’s immigration status before the tenancy commences, similar to employers’ obligations to conduct Right to Work checks. The rules impact the timing of an assignee’s ability to secure housing depending on the willingness of landlords to arrange accommodation prior to visa approval or biometric residence permit collection (which can take some weeks after arrival in the U.K.).

The Act also introduces a number of additional checks when migrants seek other services such as opening a bank account or obtaining a driver license. Assignees should be aware of these new obligations, and in most cases will need to wait until the biometric residence permit is available (two to four weeks) before applying for such services. Employers should be prepared to confirm an assignee’s status if requested by a bank, the Driver and Vehicle Licensing Agency, or the assignee.

Other sections of the Act deal with enforcement powers, detention and bail and appeals rules, border security, fees and welfare of children, with lesser impact on employers, but which nonetheless demonstrate a punitive migration regime in which global employers and employees must operate.

BAL Analysis: U.K. companies should be aware of the increased enforcement environment against illegal working and violations of labor market laws. Corporate employers should also be aware of how this more hostile approach will impact their employees, albeit indirectly, as it increases the administrative burden on assignees moving to the U.K. and on recruiters and HR personnel responsible for ensuring that right-to-work documentation is fully in place. The stricter enforcement measures also directly increase the costs a business must bear in order to employ migrant workers. BAL can assist employers in reviewing their policies and conducting compliance audits.

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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