Tier 2 Sponsorship Civil Penalty Notice

Few employers are aware that obtaining a UK Sponsor Licence is only half the battle when it comes to hiring workers on a Tier 2 or Tier 5 work visa. Meeting regulatory compliance can be challenging and is usually best achieved by instructing an experienced Immigration solicitor to advise your HR team.

One of the most serious breaches of Sponsor Licence compliance is employing an illegal worker, either intentionally or unintentionally. If the Home Office believes an employer with a Sponsorship Licence has illegal workers on their staff, they can issue an Immigration Civil Penalty Notice.

What is an illegal worker?

An illegal worker is someone who does not have a legal right to work in the UK. Their visa may have expired, or they may have entered the country illegally, or have a visa, but it does not entitle them to work. If you are found to have employed such a person, and you have a UK Sponsor Licence, you may be liable, regardless of whether you know the worker was illegal.

Who issues Immigration civil penalty notices?

Civil Penalty Notices are issued by the Home Office or UK Visas and Immigration.

What is the penalty for being caught employing an illegal worker?

You can be fined up to £20,000 per illegal worker; however, technically, the level of fine is unlimited. You may also face up to five years’ imprisonment. The Home Office may also publish details of your penalty as a deterrent to others. You are also likely to be downgraded on the register of sponsors, or have your licence revoked altogether. This becomes business-critical when your organisation can no longer issue Certificates of Sponsorship and talent from outside the EEA.

How does the Home Office go about issuing an Immigration civil penalty notice?

The Home Office will assess liability to pay a civil penalty using the Consideration Framework, which is set out in the Code of practice on preventing illegal working: civil penalty scheme for employers. There is a three-stage consideration for every case:

Stage 1: Determining liability

If your organisation is visited by the Home Office and an illegal worker is found, if you produce the required documentary evidence to establish the statutory excuse against the liability to pay a civil penalty, a No Action Notice will be issued, and the case closed. A statutory excuse refers to the fact that you had conducted the required Immigration checks before the worker started their Employment and you can prove you did this.

If the employer cannot establish a statutory excuse, they will be issued with a referral notice. This notice confirms that the matter has been referred to the Home Office Civil Penalty Compliance Team (CPCT) for consideration of liability for a civil penalty (or penalties). Thought will also be given to whether to prosecute the employer for knowingly employing an illegal worker.

Stage 2: Determining the level of breach

There are different levels of penalty for those who have been found employing illegal workers within the previous three years and for those who have not.

Where the employer has hired illegal workers within the previous three years, the penalty starts at £20,000 per illegal worker.

In most other cases, the penalty starts at £15,000 per illegal worker.

Stage 3: Determining the penalty amount

The Consideration Framework prescribes the mitigating factors that must be applied in every case:

• Mitigating factor 1—has the employer already reported a suspected illegal worker to the Home Office and received a unique reference number?
• Mitigating factor 2—has the employer actively co-operated with the Home Office?
• Mitigating factor 3—has the employer got effective document checking practices in place and do they generally comply with employer duties to prevent illegal working?

Employers will only qualify for reductions if they can provide evidence that they have met the mitigating factors. Each mitigating factor will result in a reduction of the penalty by £5,000 per worker.

However, it is important to note that a business will only qualify for a reduction in terms of mitigating factor 3 (effective document checking practices) if it has already qualified for a reduction under mitigating factors 1 and 2, (reporting suspicions to the Home Office and active co-operation with the Home Office respectively).

In practice, this results in most businesses only qualifying for one £5,000 reduction in terms of active co-operation. Often small businesses may have genuinely believed its employee to have had the right to work, often based on a misunderstanding of documents shown (e.g. reliance on a driving licence or production of a National Insurance Number) and have never had any cause for suspicion which would trigger contact with the Home Office.

Can I challenge a civil penalty notice?

An employer can challenge a civil penalty notice. In the first instance, you will have 28 days to contact the Home Office objecting to the civil penalty notice because:

• you are not the employer of the illegal worker
• you have a statutory excuse
• the penalty is too high and does not take any mitigating factors into account

An appeal can also be made to the court. Once the appeal has been lodged, the Home Office must disclose the evidence it holds in relation to the issuing of the penalty. The relevant court can allow the appeal and cancel the penalty, allow the appeal and reduce the penalty or dismiss the appeal entirely. An appeal must be lodged within 28 days of the Home Office’s final decision.

It is imperative to instruct an experienced Immigration lawyer to advise you on challenging a civil penalty notice to ensure you achieve the best outcome possible.

Final words

The consequences of receiving an Immigration civil penalty notice should not be underestimated. You may not only lose your Sponsorship Licence, but your business reputation could be severely damaged. It is, therefore, crucial to contact an expert Immigration solicitor as soon as you receive the notice, to understand the best course of action available to you.

OTS Solicitors is one of the most respected Immigration law firms in London. By making an appointment with one of our Immigration solicitors, you can be assured of receiving some of the best legal advice available in the UK today. We can assist you with all aspects of Sponsor Licence and Tier 2 (General) applications as well as civil penalty notices and appeals.

If you wish to discuss any of the points raised in this blog, please phone our London office on 0203 959 9123