Immigration Compliance Part 3 - Home Office Audit: What happens if you receive a referral for a penalty?

If the Home Office discovers non-compliance during a visit, they may issue a civil penalty notice to employers who have failed in their duties under the prevention of illegal working regime. The consequences can be severe, including substantial fines.

Here’s a breakdown of what to expect and how to navigate the process:

Potential consequences of non-compliance

Fines:

• First Breach: Up to £45,000 per worker.

Repeat Offence: Up to £60,000 per worker.

Sponsor Licence:

              •            Refusal to issue or renew a licence.

              •            Revocation or suspension of an active licence.

              •            Prevented from applying for a licence for 6-12 months.

Workers' visas:

             •            Revocation or curtailment of the sponsored workers' visas.

For a visual representation of the compliance audit process, refer to our flowchart 

 (click here to download).

Ensuring a statutory excuse

To avoid penalties, employers must carry out the prescribed right to work checks correctly before employment begins.

Steps to ensure compliance:

Obtain documents:

• Accepted documents can be found in List A or B of the Employers’ right to work checklist.

List A – Permanent Right to Work:

              •            Provides a continuous statutory excuse.

List B – Limited Leave to Remain:

              •            Group 1: Statutory excuse valid for the duration of leave.

              •            Group 2: Statutory excuse valid for 6 months with a Positive Verification Notice.

Check documents:

• Verify the genuineness of the documents and the identity of the holder.

Copy documents:

• Make and securely retain unalterable copies of each document and the date the check was made.

Conducting checks

• Manual: For British/Irish passport holders.
• IDSP Services: Digital verification for British and Irish passport holders.
• Online Right to Work Check: For electronic status and BRP holders.
• Employer Checking Service (ECS): For individuals without proof of right to work, including those with pending immigration applications.

Handling a Civil Penalty Notice

Payment

• Pay by the specified date.
• Faster payment option: 30% reduction if paid within 21 days (first-time offenders only, no instalments).

Objecting

You can file an objection in writing within 28 days on grounds such as:

• Incorrect liability.
• Existence of a statutory excuse.
• Incorrect penalty level: For example, the Home Office has calculated the penalty incorrectly or the employer has evidence that they have met specified mitigating criteria which has not been taken into account. 

An Objection Outcome Notice will determine if the penalty is cancelled, reduced, or maintained.

Appealing:

• If the Notice is upheld, the employer may apply to the County Court within 28 days of either the date specified on the Objection Outcome Notice or the new Civil Penalty Notice.
• If no response to the objection within 28 days, appeal within the same period.

Final Thoughts

Performing right to work checks ensures a statutory defence against civil penalties. Employers should have robust recruitment practices, report suspicions of illegal working, and cooperate with the Home Office to mitigate penalties. At Howard Kennedy, we offer compliance support and mock audits to prepare for Home Office visits. We're also here to help your business should you be issued with a civil penalty notice. 

 Contact John Kiely for more information.