The potential pitfalls of employing workers from overseas

Charlotte Geesin looks at the law around hiring people from abroad, and what employers should do if they accidentally recruit someone illegally

Free movement between the UK and the EU – which allowed workers from the EU to come to the UK for work without restriction – ended on 31 December 2020. On 1 January 2021, the UK implemented the current points-based immigration system to govern the influx of labour into the country.

The points-based system prioritises skill and talent over a person’s country of origin and makes it harder for businesses in the UK to employ talent from overseas and encourages them to look to the domestic labour market first. 

Anyone who wants to come to the UK for work under the new system needs to accrue a certain number of points across a number of criteria to be eligible for entry.

How has the points-based system changed the way businesses recruit workers from overseas?

The new system limits UK businesses employing EU nationals without restrictions and minimum salary requirements. EU workers are also now subject to the same immigration restrictions as employees from the rest of the world.

To employ skilled workers (eg. doctors, nurses, teachers, engineers), employers now need to hold a sponsor licence. Without a sponsor licence an employer can only recruit domestically for these roles. 

The ability for businesses to employ unskilled workers from overseas is now limited, and we are seeing the impact of these restrictions with employers struggling to fill roles that were typically taken by EU nationals due to a lack of available domestic workers.

How can business safeguard itself from employing an illegal worker

The only way to safeguard against employing illegal workers and establish a statutory defence if you are found to have done so unknowingly is to carry out right to work checks on all prospective employees. 

The right to work check is a three-step process which employers need to follow when it comes to checking an applicant’s personal documentation. The associated Code of Practice lists acceptable documentation and employers need to obtain original copies of the documents from the applicant, check them in the presence of the individual and retain copies on file. There is an online checking service which can be used by employers if the individual gives their consent and gives right to work information in real time. 

If someone cannot provide documentation to establish a right to work, employers can contact the Home Office in limited circumstances for positive verification. It’s advisable for businesses to have a right to work check policy in place with associated management guidance, and to ensure they can provide evidence that all relevant managers have received training in the company’s procedures. 

Contractual and recruitment paperwork should also reference the right to work process and employers should not offer work to individuals where they cannot establish a right to work. 

What should a business do if they accidentally employ an illegal worker?

If a business is employing a migrant worker and they no longer have permission to be in the UK or undertake the work on offer, they should seek legal advice. Termination of employment will need to be considered, but there will be procedural steps you will need to take to ensure the dismissal is lawful. 

Continuing to knowingly employ an illegal worker risks significant consequences for both the employer and the business, including tough civil and criminal sanctions as well as potential disruption to the business and serious reputational damage.

Even where an employer has conducted the correct right to work checks, they may still be liable where they knew or where it was reasonably apparent that the documentation checked was not genuine, did not rightfully belong to the holder or the work was not as permitted under their visa conditions. In these circumstances, employers will be unable to establish a ‘statutory excuse’ to defend against Home Office penalties.

If an employer is found to be knowingly employing an illegal immigrant, they could face an unlimited fine and five years in prison. Directors face being disqualified and businesses face serious reputational damage.

What if a business finds out an employee is an illegal immigrant?

It is a criminal offence to undertake work at a time when that person knows, or has reasonable cause to believe, they are disqualified from working by reason of their immigration status. Employers can report illegal immigrants on the Home Office website or by calling the Immigration Enforcement hotline. 

While they can do so anonymously and in confidence, it is also possible to supply business details, which may help demonstrate a commitment to immigration compliance during any subsequent UKVI investigation into illegal working at your organisation.

While an employer is not duty bound to report an illegal immigrant, they should consider the impact on their Home Office compliance and reputation should the illegal worker come to the Home Office’s attention via another source of intelligence, such as an anonymous tip off.

Charlotte Geesin is Legal Director at Howarths