Employing Illegal Immigrants: Investigations and Penalties – Part 2

The continuation of our guide to the investigation process and the potential penalties you could face for employing illegal workers.


Civil Penalty Notice

If the case worker decides you are liable for a civil penalty for your role in employing one or more illegal workers, you will receive a civil penalty notice for a specified amount. The notice will determine who is responsible for the penalty you personally or the limited company or both. The notice will tell you why you are liable for a penalty and which worker the fine applies to. The penalty notice will also state:

• The breach date
• The amount you have to pay
• The date the payment is due
• Whether a fast payment is available (This reduces the penalty amount by 30 percent if full payment is made within 21 days)
• How you can object to the penalty
• How the penalty will be enforced if you refuse to pay

Warning Notice

In some circumstances, you might receive a warning notice. To be liable for a warning notice, you will have employed illegal workers without a statutory excuse, but you will not have been issued with a civil penalty notice or a warning notice previously, nor will you have been convicted under section 21 of the Immigration Act 2014 within the last three years. You will also have met all the UKBA’s mitigating factors to prevent a civil penalty.

The warning notice will also include details about why you are not being issued with a financial penalty on this occasion. However, you are receiving a formal warning that will be taken into account if you were to employ illegal workers in the future.

If you receive a civil penalty or a warning notice, but fail to conduct the necessary employment checks in the following three years, you could receive the maximum civil penalty of £20,000 for each illegal worker.

No Action Notice

If you have established a statutory excuse for the employment of the illegal workers, you will be issued with a no action notice. This means no further action will be taken, and will not be taken into account if you are found to be employing illegal workers in the future.

Enforcement action

If you fail to pay the penalty, or exercise your right to object or appeal by the deadline given, you could be subject to enforcement action. Enforcement action will involve action in the civil court to recover the unpaid penalty, which could result in a disqualification for company directors. The court’s decision on the enforcement action will also enter the County Court Register of Judgments. Banks and other finance providers can check this register before agreeing to offer credit or other services, which can impact on your ability to secure credit in the future.

Be aware your company can be required to provide a security bond which must be provided before being allowed to continue to trade so this kind of notice is very serious and should not be ignored. This kind of bond is often supported with a personal liability notice (PLN) making the director responsible.

Your right to object

If you receive a civil penalty notice, you have 28 days from the date of the notice to object. An objection form will be included with the civil penalty notice. To object, you should indicate on which of the three grounds you are objecting the decision, giving your reasons and providing supporting evidence.

You can object on the grounds of:

• You are not liable to pay the penalty (i.e. you are not the illegal worker’s employer)
• You have a statutory excuse (you carried out the relevant checks)
• The penalty is too high (the penalty was calculated using the wrong scale, or mitigating evidence has not been taken into account)

A caseworker will review the objection, and issue one of five potential outcomes:

• A warning notice
• The civil penalty is increased
• The civil penalty is maintained
• The civil penalty is reduced
• The civil penalty is cancelled

Employing illegal workers and failing to carry out the necessary checks could result in a maximum £20,000 and a lengthy director disqualification. Acting in the proper way and always meeting your obligations as a company director is the only way to keep your business out of trouble.

You ignore this advice at your peril as I can testify we have seen a significant increase in the last 3-6 months in this kind of action against directors resulting in significant fines and bans. We have had some success however when negotiating with the relevant government bodies to be allowed to complete a pre-pack or company voluntary arrangement allowing the business to continue trading.

If you are unsure of what action to take, call 08000 746 757 to speak to someone who can provide discreet immediate help.


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