In spring 2017, the UK started the two-year process of leaving the EU. While the nebulous and intimidating concept of Brexit may already feature in your business plans and risk assessments, business immigration perhaps doesn’t. If this is the case, then now is the time to consider including it.
If you employ staff, you should already be carrying out prescribed ‘right to work’ checks. These are checks to determine whether employees have the right to work in the UK, and to carry out the job in question. This requires initial checks before an employee starts work and, in some cases, follow-up checks.
Home Office guidance
In November 2017, the Home Office published updated guidance on how to carry out right-to-work checks and the potential penalties for failing to do so properly. The most significant update is that the Home Office is now recommending that business owners should check the right-to-work of anyone involved in their business – whether or not they are employees.
The updated guidance states that there are “compelling reasons” for doing this, including the fact that the removal of illegal workers is likely to “disrupt your operations and result in reputational damage”.
For businesses using agency staff, contractors or temporary workers (who may or may not be employees from a legal perspective), such an approach could have significant implications.
Even before the updated guidance, some organisations were choosing to play it safe – checking the right-to-work of everyone involved in their business and cutting through the nuances of contractor/worker/employer with a broad sword approach. The most common reason for this was to try and avoid the reputational damage of being associated with illegal workers.
While the new guidance may point businesses firmly in this direction, this sword has another edge to be alive to. By carrying out a right-to-work check, employers are effectively treating individuals as employees, which could be used against the business if there were ever a dispute over an individual’s employment (or tax) status.
The legal basis for the Home Office’s new (broader) approach is unclear: the legislation governing right-to-work checks still only applies to employees. Unfortunately, there’s no indication in the updated guidance of what potential penalty businesses may face for failing to make wider checks (ie against those who are not employees).
What is clear is that the increased media and political interest around worker exploitation and immigration that we saw throughout 2017 looks set to continue into 2018.
The updated Home Office guidance reiterates that information and intelligence is actively shared among government agencies and departments (a ‘whole government approach’) with a view to tackling illegal working issues (and it specifically names HMRC in this regard).
The stakes for failing to comply with the requirements regarding checks on employees are high. Potential penalties include a £20,000 ‘civil penalty’ fine per illegal worker and/or an unlimited fine and/or a maximum of five years in prison.
This is in addition to: being publicly named and shamed on the government’s website; facing closer scrutiny in the future not only from the UK Visas and Immigration division, but also potentially from other government departments such as HMRC; and, if your business holds one, potentially having your sponsor licence revoked. Given all this, if you don’t already do right-to-work checks, it’s time to tighten up your procedures.
There’s another big longer-term reason for thinking about business immigration in 2018. Until now, immigration has often made the headlines but not the boardroom. That is changing. Whatever final deal is reached on Brexit, the labour market will be affected.
Those in recruitment will have already felt, firstly the ripples (when the referendum die was cast), then the waves and now the gathering storm. A steady stream of EEA migrant workers is no longer something employers can take as a given. As skills gaps become apparent, businesses may want to sponsor non-EEA nationals.
At the moment, the first step for companies that wish to engage such migrant workers is usually to obtain a sponsorship licence under Tier 2 of the UK’s points-based system. Since April 2017, sponsors of some Tier 2 migrants must pay an upfront immigration skills charge. The sponsorship requirements are prescriptive, technical and change frequently.
Looking at your labour supply with a long-term eye and understanding how to navigate the business immigration minefield sooner, rather than later, could stand your organisation in good stead, ready for business into 2019 and beyond.
Simon Whitehead is a partner at HRC Law