Civil Penalty Immigration Fine: Help for Employers

If you’ve received a Home Office civil penalty for illegal employment, we can help.

We are a team of specialist immigration compliance advisers with extensive experience in challenging Home Office civil penalty notices for illegal working.

We understand that civil penalty fines can be devastating for a business; both in financial terms, but also the impact on your sponsored workers. We can help you understand the allegations you are facing, and help you make an informed decision on your next steps, either to challenge, reduce or pay the fine.

The Home Office doesn’t always get it right. Information may have been overlooked, or there may have been mistakes in how enforcement officials handled the process. We will assess the specific circumstances, identifying potential grounds for challenge and guiding you through the process to minimise the impact on your organisation.

Contact our advisers today.

 

Section A: What is a Civil Penalty for Illegal Working?

 

Civil penalty notices are issued by the Home Office to employers alleged to have failed in their duties under the prevention of illegal working regime.

UK employers are required by law to ensure their employees are eligible to work in the UK and permitted to undertake the job they are being employed to do. Employers meet this requirement by conducting Right to Work checks before an individual starts employment, and carrying out follow-up checks if the individual has time-limited permission to work. The employer also has to retain records of the document checks for inspection on request.

Under section 15(2) of the Immigration, Asylum and Nationality Act (IANA) 2006, if an organisation is found by the Home Office to be employing a migrant worker illegally, and are unable to rely on a statutory excuse by having previously carried out a prescribed right to work check, you may be issued with a Civil Penalty Notice. The notice will set out the total amount that you are liable to pay and the date by which that payment must be made.

Civil penalties for illegal working can be issued where an employer has failed to conduct a right to work check, either correctly or at all. It could also be either where you have carried out a check but you knew, or it was reasonably apparent, that the documentation was not genuine, this did not rightfully belong to the employee or the work on offer was not permitted.

A statutory excuse is a legal defence protecting employers from civil penalties for illegal working, provided they conducted proper right to work checks as prescribed by current Home Office guidelines.

Civil penalties remain a lucrative source of revenue for the Home Office, with both small and large businesses at risk of allegations of illegal working. The fines are substantial. If you employ someone without the right to undertake work in the UK or to do the job role on offer, you may incur a civil penalty of as much as £45,000 per illegal worker for a first breach and up to £60,000 for repeat breaches.

As well as the obligation to pay a substantial fine, a civil penalty may result in criminal prosecution against the owner, enforced debt action, a County Court judgment, sponsor licence revocation, adverse impact on the ability to obtain future credit, disqualification of company directors or the business being forced to cease trading.

The Home Office also publishes an annual list of all the names of UK businesses that have been issued with civil penalties, which can attract negative press coverage, impacting profit, credibility and reputation.

 

Section B: How Does the Civil Penalty Process Work?

 

Taking preventative compliance measures is the most effective way to avoid falling foul of immigration breaches, but if you are facing immigration enforcement action and a possible civil penalty notice for illegal working, it can be helpful to understand what the Home Office process is before you decide your next steps.

 

Stage 1 – Investigation

 

The Home Office routinely undertakes compliance investigations to ensure employers adhere to UK immigration laws, particularly around illegal working. Investigations are typically triggered by intelligence received by the Home Office, including tip-offs from disgruntled employees, former staff, customers, members of the public or other government agencies.

Increasingly, the Home Office is relying on digital audits of employment records and documentation remotely, requesting evidence of right to work checks, payroll records and associated documentation electronically, particularly in cases involving incomplete or suspicious documentation.

Alternatively, the Home Office may decide to conduct a site visit, either announced or unannounced. During site visits, immigration enforcement officers physically inspect business premises, interview staff and gather evidence directly from the workplace.

Following either type of investigation, if evidence of illegal working is identified, the matter is referred to the Home Office civil penalty compliance team for further assessment and potential action under the civil penalty scheme.

 

Stage 2 – Referral Notice & Information Request

 

Upon referral, the Civil Penalty Compliance Team will issue a Referral Notice indicating that your case is under consideration. Following this, they will send an Information Request to the organisation seeking specific details about the employment and right to work checks conducted, for example:

 

• Confirmation as to whether you are the employer of the workers identified. If this is not so, details will be requested of the business employing the identified workers.
• Confirmation as to whether right to work document checks have been carried out and when they were carried out.
• Confirmation as to whether reports were made of suspected illegal workers.
• Confirmation as to whether you employed the identified workers and when.

 

You will usually be given 10 days to return the completed information request response form and supporting documents. This deadline is strictly enforced, and failing to respond within this timeframe can adversely affect the outcome of the civil penalty determination, including the level of penalty ultimately issued.

The response to the information request also significantly influences the outcome. While not mandatory, obtaining legal advice can help ensure that your submission effectively addresses the Home Office’s concerns. We would usually advise that representations providing a detailed defence against each allegation be submitted alongside the response form.

 

Stage 3 – Deciding the Outcome

 

When considering your response to the information request, the civil penalty compliance team will look at four key criteria to determine the outcome:

 

• The employer’s history of compliance with right to work checks.
• Whether the employer reported suspected illegal working proactively.
• The level of cooperation demonstrated during the Home Office investigation.
• Whether effective procedures for document checking were in place.

 

The team assesses each of these factors individually to decide on the appropriate penalty amount, taking into account any evidence provided.

The civil penalty compliance team may decide to issue a formal Warning Notice with no penalty, or a reduced civil penalty, if they are satisfied that successful mitigation has taken place as a result of the information provided in the response. This is typically the case if they determine that certain mitigating factors are met, provided it is a first-time breach within the last three years.

Alternatively, a reduced penalty may be issued if only one or two mitigating criteria have been satisfied.

Where no mitigating circumstances are evidenced, or if the employer has repeatedly breached the rules, the full penalty amount will usually apply.

The level of fine is determined on a case-by-case basis, using a sliding scale, up to the relevant maximum. For a first breach in a 3-year period, the maximum penalty is £45,000 per illegal worker, before any reductions are applied, whilst for a second or subsequent breach, a fine can be issued up to £60,000.

The level of fine will also be calculated taking into account your history of compliance as an employer in respect of right to work checks and whether you qualify for a penalty reduction by providing evidence that you have met any or all of the mitigating factors.

 

Stage 4 – Civil Penalty Notice Issued

 

Having received a civil penalty notice, you have 28 days to either pay the penalty in full, arrange an instalment plan or submit an objection.

If the objection is unsuccessful, you have an additional 28 days to appeal the decision to the County Court. You will have 28 days to make full payment, set up an instalment plan, or object to the penalty.

For first-time breaches, the civil penalty notice may include a Fast Payment Option, allowing a 30% reduction if the full amount is paid within 21 days of the notice date.

Demonstrating each mitigating factor can reduce the penalty by £5,000 per illegal worker. If all three factors are evidenced and this is a first breach within three years, the Home Office may issue a Warning Notice instead of a financial penalty.

As the owner of a business, you will need to decide whether it is worth outlaying the costs on instructing legal representation to object to the civil penalty or whether you should pay the penalty.

This decision will depend on whether there are strong grounds to object to the allegations in the civil penalty notice, which will result in the penalty being reduced.

 

 

Section C: What to Do if You Have Received a Civil Penalty

 

If you have been issued a civil penalty, you generally have three options:

 

• You can object to the fine.
• You can submit a request to the Home Office for a payment plan.
• You can pay the penalty in full.

 

Whichever option you proceed with, you have only 28 days to respond to the Home Office. This deadline is fixed and cannot be extended.

It is crucial at this stage to obtain early, specialised legal advice to understand the next steps available to you and which option is the best course of action for your situation.

Our UK immigration solicitors have extensive experience advising employers on the merits of their case and whether, on consideration of all the facts, there are grounds to challenge the fine or whether it makes better financial and commercial sense to pay the penalty.

 

1. Can you appeal a civil penalty for illegal working?

 

Employers facing a civil penalty for illegal employment may be able to challenge the fine by submitting an appeal. This can be to either lower the level of the original penalty, or to remove the penalty altogether. There are a number of factors at play and employers should also be aware that should they decide to appeal a civil penalty, the Home Office has the right to issue an increased fine if the employer loses their appeal, so it will be important to evaluate your grounds for appeal to ensure there is merit and strength in your case.

The appeals process is complex and time sensitive. It takes careful and experienced assessment of the full circumstances, from the nature of the alleged breaches, the evidence being relied on and the conduct of Home Office enforcement officials during the investigation.

The Home Office guidance sets out how and when you may exercise the right to object to the imposition of a civil penalty for illegal working and also appeal to a court of law. You can object and appeal on the following grounds:

you are not liable to pay the civil penalty, for example, because you are not actually the employer of the illegal worker(s) in question
you have a statutory excuse, where you conducted a prescribed right to work check, or
the amount of the penalty is too high, where this has been miscalculated or you can show that you have met certain mitigating criteria which has not been taken into account.

An objection must be raised within 28 days by filing an Objection Form and any additional evidence. This can result in a Warning Notice, the upholding of the civil penalty, a penalty reduction, an increased penalty or the cancellation of the penalty. In cases where an objection is denied, you can appeal to the County Court within 28 days.

If the Home Office visits your business premises and you are able to establish a statutory excuse in respect of the illegal workers identified, no further action will be taken. You will not be issued with a Referral Notice, but will instead be served with a No Action Notice. A No Action Notice will not have an adverse impact in the event of any subsequent penalty. Equally, if a Civil Penalty Notice is cancelled following an objection or appeal, and not replaced by a Warning Notice, this will not be taken into account for any future breaches.

 

2. How to appeal a Civil Penalty

 

If you receive a civil penalty for illegal working, you have 28 days to pay the fine or submit an appeal. The appeal can either be to lower the level of the original penalty, or to remove the penalty altogether.

Challenges have to be made on specific grounds, within specific timeframes, and be supported by relevant documentary evidence. The approach you take should be dependent on your organisation’s circumstances and the level of the civil penalty notice you have received.

One important consideration is that the Home Office has the power to increase the level of the original penalty at the appeal stage, so you should only generally proceed with an appeal only where you are confident in the merit of your challenge following professional advice.

As an outline, the appeals process is generally made up of two key stages: first, taking professional advice on the merit of making an appeal, or whether in the circumstances (such as the nature of the breach), it would be advisable to pay the fine. Our business immigration specialists are experienced in challenging civil penalty fines, and will assess your case before making a recommendation. If you decide to appeal, we will work with you to compile the objections and submit a response to the notice on your behalf within the 28 day period.

Grounds for objection fall within the following:

 

• The penalty relates to worker(s) who are not with your employment and you are therefore not liable for the penalty, or
• You are relying on a statutory excuse as you can evidence that you took appropriate actions to check for illegal workers and as such had no reason to suspect illegal working, or
• The level of fine is unreasonable given your conduct through the investigation and your overall immigration compliance methods, as such the fine should be lowered.

 

If the initial appeal is not successful, you can register an appeal with the County Court to have the penalty adjusted or repealed. This will involve a hearing where the evidence will be considered.

 

3. How to pay a civil penalty fine for illegal working

 

The amount you must pay and the final date for making payment will be set out in your Civil Penalty Notice. However, if you can pay the amount quickly, this may result in a discount. Equally, if you are struggling to pay, you may be able to pay by instalments.

Importantly, if you fail to pay your civil penalty in full, or object or appeal, by the specified due date, the penalty will be registered with the court, after which enforcement action may be immediately commenced. Equally, if you do not pay any instalment(s) on the agreed date(s), debt recovery enforcement action will again be taken.

 

a. Fast payment option

If you are able to make payment within 21 days of the date of your Civil Penalty Notice, the fast payment option will reduce the amount of your penalty by 30%. The reduced penalty amount and final date for making payment will be clearly shown in your notice.

If you object to the penalty before the deadline set out in your Civil Penalty Notice, you will still be eligible for the fast payment option. If, following your objection, you are required to pay a penalty, you will be issued with a fresh notice setting out a new date to pay your penalty at the lower amount. However, if you have previously been found to have employed illegal workers in the last 3 years, you will not be eligible to make a reduced payment.

 

b. Payment by instalments

If you cannot pay the civil penalty in a single lump sum, the Home Office may agree for you to pay your penalty by instalments instead, usually up to 24 months, although exceptionally as much as 36 months. However, in these circumstances, the penalty amount will not be reduced, where a fast payment option cannot be paid by instalments.

In order for any application to be considered, you must submit details of your ability to make payments over the instalment plan period, together with reasons as to why you cannot pay the full penalty within 28 days of the Civil Penalty Notice. Your request to pay by instalments will not affect the time limits for bringing an objection or an appeal.

 

Section D: Impact of Receiving a Civil Penalty

 

Employing illegal workers can have serious consequences for both you and your business, including but not limited to sizeable immigration civil penalties. Your business and employer-brand will be at serious risk from reputational damage, where the government publishes a quarterly report, listing the penalties given to employers in different geographical areas across the country. The report sets out the name and address of each business, together with the final value of each civil penalty for illegal working.

A civil penalty for illegal working can also lead to any sponsor licence that you may have being downgraded, suspended or revoked. It could also impact your ability to obtain a sponsor licence in the future and result in disqualification for any company directors. Equally, if enforcement action is taken in the county court for non-payment of a penalty, this could have an adverse impact on your ability to act as a director.

You may also be liable to criminal prosecution if you knew, or had reasonable cause to believe, that an employee did not have permission to undertake work in the UK or to do the job on offer. The offence of knowingly employing an illegal migrant worker is punishable by up to 5 years’ imprisonment, an unlimited fine, or even both.

If you have found yourself facing a possible civil penalty for illegal working, you should immediately seek expert advice from an immigration specialist. Your legal adviser can also help you to put in place compliant working practices when it comes to right to work checks, in this way helping to reduce the risk of another civil penalty in the future.

 

Section E: Examples of Common Scenarios Resulting in a Civil Penalty

Employers of all sizes and from all sectors are at risk of allegations of illegal working. In many cases, breaches centre on genuine mistakes and oversights, but regardless, these remain grounds for the Home Office to take enforcement action and issue significant fines.

The following are some of the more common errors that lead to civil penalties:

 

Failure to conduct compliant Right to Work checks

 

A frequent scenario leading to civil penalties arises when employers hire individuals without properly completing right to work checks. Employers must verify documents thoroughly before employment begins. A penalty commonly occurs if checks were incomplete, incorrect, or not performed at all, even if unintentionally.

 

Employing someone with an expired visa

 

Another common issue involves employers inadvertently retaining an employee whose immigration permission has expired. Employers are required to re-check visas for employees with limited leave to remain before expiry. Penalties are often imposed when an employer continues employing someone without current valid immigration status, even if the original hiring checks were correctly done.

 

Relying on Forged or Fraudulent Documents

 

Employers occasionally receive penalties for unknowingly accepting forged or fraudulent identity documents. Although some falsifications are sophisticated, employers must reasonably examine the authenticity of presented documents. A penalty can follow if it is later determined that the documents were obviously false or could have been identified as fraudulent through diligent inspection.

 

Employing students beyond their permitted hours

 

Civil penalties frequently result from breaches relating to students employed beyond their allowed working hours. For example, international students on Tier 4 or Student visas are typically restricted to working 20 hours per week during term time. Employers failing to track these limits and subsequently employing students for additional hours risk substantial penalties.

 

Poor record-keeping

 

Employers are required by law to retain evidence of right to work checks throughout employment and for two years afterwards. Civil penalties commonly result when employers discard, lose, or fail to keep proper records demonstrating compliance with immigration regulations, making it impossible to prove correct checks were initially carried out.

 

Section F: How to avoid civil penalties for illegal working

 

All employers have a responsibility to prevent illegal working by carrying out prescribed right to work checks on all prospective employees, prior to their employment commencing, as well as follow-up checks on any existing employees with a time-limited right to work in the UK.

By conducting a right to work check, and doing so in the correct way, this will minimise the risk of employing an illegal worker. Equally, where you can show that you have carried out a right to work check correctly, you may be able to establish a statutory excuse against civil liability if you are subsequently found to be employing someone illegally.

There are currently three acceptable ways to carry out a right to work check: a manual document-based check, a digital online check, or using the Employer Checking Service. The appropriate method largely depends on the nationality and immigration status of the prospective or existing employee.

British and Irish nationals should provide their passport, which can be either current or expired. Alternatively, they may present other acceptable documents listed in the Home Office’s current guidance for manual checks, such as a birth or adoption certificate combined with evidence of their National Insurance number.

Foreign nationals holding digital immigration status (such as an eVisa) must provide the employer with a ‘share code’ so the employer can conduct an online digital check via the Home Office’s online checking service. This service confirms immigration status in real time and must be carried out prior to employment starting.

Where foreign nationals do not hold digital immigration status or cannot provide a share code, employers must conduct a manual document check of original physical documents from the Home Office’s list of acceptable documents.

If an employee or candidate cannot produce the required documents or a valid share code due to pending immigration applications, appeals, or administrative reviews, employers must request verification from the Home Office through the Employer Checking Service (ECS). If the individual has a current right to work, the Home Office will issue a Positive Verification Notice confirming their employment eligibility.

Employers, particularly those who have previously faced penalties for illegal working, must strictly adhere to the latest Home Office guidance detailed in the Code of Practice on Preventing Illegal Working (effective from 13 February 2024).

 

Section G: Summary

 

A civil penalty is a fine imposed by the Home Office on UK employers who hire or retain employees without valid immigration status. Under current UK immigration regulations, employers must check and verify each worker’s right to work before employment starts, and maintain records demonstrating compliance.

Failure to conduct proper right to work checks, employing individuals whose visas have expired, or retaining inadequate documentation can result in financial penalties. Employers must also consider the risk of increased scrutiny from immigration enforcement authorities, potential loss or suspension of sponsor licences and operational disruption caused by investigations.

Employers who receive a civil penalty notice will need to act quickly, seeking professional legal guidance on appealing or mitigating penalties.

 

Section H: Need Assistance?

 

DavidsonMorris have extensive experience supporting employers facing a civil penalty.

If you have received an information request or a civil penalty notice and want to understand your options, contact us for an assessment of your matter so you make an informed decision about your next steps.

 

Section I: Civil Penalty FAQs

 

What should I do immediately after receiving a civil penalty notice?

You should review the notice carefully, note key deadlines, and consider seeking professional legal advice promptly. It is important to assess whether you have grounds to appeal or request mitigation.

 

Can a civil penalty be reduced or cancelled?

A civil penalty can sometimes be reduced or cancelled if you can show valid reasons such as having conducted correct right to work checks, demonstrating compliance, or presenting mitigating circumstances to the Home Office.

 

How long do I have to appeal a civil penalty?

You must submit your objection or appeal within 28 days from the date of receiving the penalty notice. Missing this deadline may mean you lose your right to challenge the penalty.

 

What happens if I do not pay the civil penalty?

Failure to pay a civil penalty can lead to debt recovery action by the Home Office, court proceedings, and may negatively affect your ability to sponsor foreign workers or renew an existing sponsor licence.

 

What is a statutory excuse?

A statutory excuse is a legal defence protecting employers from civil penalties for illegal working, provided they conducted proper right-to-work checks as prescribed by current Home Office guidelines.

 

Will receiving a civil penalty affect my sponsor licence application?

Receiving a civil penalty can negatively influence your sponsor licence application or renewal. The Home Office may consider you unsuitable to sponsor migrant workers if you have a record of non-compliance.

 

How can my business avoid future civil penalties?

To avoid future penalties, implement robust procedures for right to work checks, maintain accurate records, regularly review compliance practices, and provide adequate staff training.

 

Is employing an illegal worker a criminal offence?

Employing someone illegally is usually a civil matter, resulting in civil penalties. However, if an employer knowingly hires or retains illegal workers, they could face criminal prosecution.

 

What evidence should I retain from right to work checks?

You must keep clear copies of documents used for right to work checks, including passports, visas, biometric residence permits, and records of when the checks were performed. These documents should be stored securely for at least two years after employment ends.

 

Can I rehire someone who previously had immigration issues?

You can potentially rehire an individual who previously had immigration issues, provided they currently hold valid permission to work in the UK and you perform and document new right to work checks carefully.

 

Do civil penalties show up on public records?

Civil penalties can appear on public records if your business is subject to the Home Office’s naming-and-shaming policy, particularly in cases of repeated breaches or high-value penalties.

 

Section J: Glossary

 

Term	Definition
Civil Penalty Notice	An official notification issued by the Home Office informing an employer that they have breached immigration laws by employing illegal workers.
Illegal Working	Employing individuals who do not have legal permission or valid immigration status authorising employment in the UK.
Right to Work Check	A statutory procedure employers must perform to verify an employee’s legal entitlement to work in the UK.
Statutory Excuse	A legal defence available to employers who have correctly carried out and documented right to work checks, protecting them against civil penalties.
Sponsor Licence	A licence granted by the Home Office that allows a UK-based employer to employ non-UK workers who require sponsorship under the points-based immigration system.
Home Office	The UK government department responsible for immigration, passports, borders, and security, including enforcement of immigration compliance.
Compliance Audit	An inspection conducted by the Home Office to ensure employers adhere to immigration rules, including proper right to work checks and record-keeping.
Immigration Enforcement	The branch of the Home Office tasked with identifying and penalising employers who breach immigration laws and regulations.

 

 

Section K: Additional Resources

 

Home Office: Employer Right to Work Checks Guidance
https://www.gov.uk/government/publications/right-to-work-checks-employers-guide
Official Home Office guidance on how UK employers must carry out right to work checks to comply with immigration law and avoid civil penalties.

 

Code of Practice on Preventing Illegal Working
https://www.gov.uk/government/publications/preventing-illegal-working-code-of-practice-for-employers
Detailed instructions from the Home Office about mandatory procedures employers must follow to establish a statutory excuse against civil penalties.

 

Civil Penalty Scheme for Employers
https://www.gov.uk/government/publications/civil-penalty-scheme-for-employers-code-of-practice
Official Home Office code explaining how civil penalties for illegal working are calculated, issued, and mitigated.

 

Appeal Against a Civil Penalty Notice
https://www.gov.uk/object-to-a-civil-penalty
Government resource detailing how employers can formally object to or appeal against a civil penalty notice, including the appeal process and deadlines.

 

Employers: Checking a Job Applicant’s Right to Work (ACAS)
https://www.acas.org.uk/checking-job-applicants-right-to-work
Practical guidance from ACAS to assist employers in fulfilling their obligations for verifying job applicants’ eligibility to work in the UK.

 

Home Office Immigration Enforcement
https://www.gov.uk/government/organisations/immigration-enforcement
Information on Immigration Enforcement activities, including inspection processes and enforcement actions against employers breaching immigration rules.

 

Sponsor Licence Compliance: Guidance for Employers
https://www.gov.uk/uk-visa-sponsorship-employers/sponsorship-management-system-sms
Comprehensive guidance from the UK government for employers holding or applying for a sponsor licence, including compliance responsibilities.

 

The Immigration Act 2016
https://www.legislation.gov.uk/ukpga/2016/19/contents/enacted
The official legislative text detailing UK employers’ responsibilities under immigration law and outlining penalties for illegal employment practices.

 

GOV.UK: Right to Work Checklist
https://www.gov.uk/government/publications/right-to-work-checklist
Home Office checklist available for download to help employers perform accurate and compliant right to work checks and maintain required records.