Civil Penalty for Illegal Working: Employers’ Guide

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 on offer. Employers meet this requirement by conducting Right to Work checks before employment starts, and by carrying out follow-up checks where permission to work is time-limited. Employers also need to retain records of the checks for inspection on request.

1. Legal Basis

Under section 15 of the Immigration, Asylum and Nationality Act 2006, the Home Office can impose a civil penalty if an organisation is found to be employing someone who is not allowed to work in the UK and the employer cannot rely on a statutory excuse. A statutory excuse is a legal defence where the employer can evidence that a prescribed check was carried out correctly in line with current Home Office guidance. The civil regime is separate from the criminal offence under section 21, which applies where an employer knew, or had reasonable cause to believe, that a worker did not have permission to work.

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 can be issued where an employer failed to conduct a right to work check at all, or conducted a check incorrectly. Liability can also arise where a check was carried out but it was reasonably apparent that the document was not genuine, did not belong to the person, or the work was not permitted. Employers are expected to have appropriate procedures in place that reflect the current rules and the latest guidance on acceptable checks.

2. Penalty levels & mitigation

Penalties are calculated using the current Code of Practice that took effect on 13 February 2024. The starting point is £45,000 per illegal worker for a first breach within the last three years, and £60,000 per illegal worker for a repeat breach within three years. These are starting figures before any reductions for mitigation. The Code provides limited reductions for reporting suspected illegal working and for active cooperation during the investigation. For a first breach only, if those two factors are evidenced and effective right to work systems are in place, the Home Office may issue a Warning Notice instead of a financial penalty.

The Home Office operates a public naming policy. Employers may be listed in quarterly reports in specific circumstances, such as where payment is not made or where there are repeat breaches after objection and appeal rights have been exhausted. Publicity can carry reputational and commercial consequences, so prompt engagement with the process and early assessment of options is important.

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.

For practical steps on preventing liability, see our guidance on the prevention of illegal working regime and ensure your internal processes reflect the current Code.

Section B: Civil Penalty Process

Taking preventative compliance measures reduces risk, but once Immigration Enforcement becomes involved, the civil penalty process follows a set path.

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.

The Home Office may conduct a desktop review of records or a site visit, announced or unannounced.

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.

Your response to any request for further information or to any form of investigation matters. If officers identify suspected illegal working, the case is referred to the Civil Penalty Compliance Team for further assessment and potential action under the civil penalty scheme.

Stage 2. Referral Notice and 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. Decision: Warning Notice, No Action, or Civil Penalty

After reviewing your response, the Compliance Team decides 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.

Stage 4. Civil Penalty Notice Issued

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. Two mitigating factors can reduce those starting points by £5,000 each, reporting suspected illegal working and active cooperation during the investigation.

If, on a first breach, you also evidence effective right to work systems, the Home Office may issue a Warning Notice instead of a financial penalty. Where you establish a statutory excuse or are not liable as the employer, a No Action Notice is issued. On repeat breaches, Warning Notices are not available.

Stage 5. Decide Your Next Steps

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.

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. It cannot be paid by instalments.

Objections can lead to the penalty being upheld, cancelled, reduced or increased.

If you submit an objection before payment, you lose the original fast payment discount, but a new 21-day fast payment period applies if the penalty is maintained following the objection outcome.

If you remain dissatisfied after the objection outcome, you can appeal to the County Court, or Sheriff Court in Scotland, within 28 days. Non-payment without objection or appeal will result in registration of the debt and enforcement action.

Ultimately, the organisation 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: Received a Civil Penalty Notice for Illegal Working?

If you receive a Civil Penalty Notice, you need to act within set timeframes and on defined grounds. The options are limited, so early assessment of evidence and deadlines is important.

Usually, you can either accept the fine and pay it, either in full or request an instalment plan, or you can object to the penalty.

You have 28 days from the date of the notice to respond. The deadline is fixed and is not extended by internal reviews or correspondence. If you plan to object, prepare a complete submission with supporting documents before the 28-day limit.

1. Accept and pay the fine

The notice states the amount payable and the payment deadline. If you choose to pay, you can either pay in full or request instalments. Non-payment without objection or appeal leads to registration of the debt and enforcement action, which can affect credit and director status.

A 30 percent fast payment reduction is available only for a first penalty if payment in full is made within 21 days of the notice date. It is not available by instalments. If you object within 28 days and a penalty is maintained, a fresh 21-day fast payment window is issued on the new notice.

If you cannot pay in full, you can request instalments. Agreements are usually up to 24 months. Provide cash-flow information and reasons explaining why full payment within 28 days is not possible. An instalment plan does not affect your right to object or appeal, but it does not qualify for the fast payment reduction.

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.

2. Challenge the civil penalty

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 at the objection stage, so it will be important to evaluate your grounds to ensure there is merit and strength in your case. 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.

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.
• 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. If no reply to your objection is received within 28 days, the 28-day appeal window runs from the date a reply should have been received. In cases where an objection is denied, you can appeal to the County Court, or Sheriff Court in Scotland, within 28 days.

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. In practice, publication usually follows specific triggers such as non-payment after objection and appeal rights are exhausted or a repeat penalty within three years, so handling deadlines and any repayment plan promptly reduces the risk of being named. Public disclosure can affect tenders, supply chain contracts and customer confidence, so a short communications plan that confirms remedial steps and policy updates is sensible.

Since July 2025, UKVI automatically reviews all sponsor licences linked to a civil penalty case, even if the penalty is later reduced or cancelled. Employers should be prepared for an unannounced audit or document request following enforcement.

As such, a civil penalty for illegal working could 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. Sponsor management duties are examined again following enforcement action, with UKVI looking at record-keeping, reporting and right to work systems across your sites. Where concerns remain, the Home Office may move quickly to escalate compliance action, so immediate remedial work on processes, training and audit trails is advisable and should be documented for use in any review.

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. Since 2025, Immigration Enforcement has referred more cases for criminal investigation where employers repeatedly breach right to work rules despite previous civil penalties. The offence of knowingly employing an illegal migrant worker is punishable by up to 5 years’ imprisonment, an unlimited fine or both. The civil and criminal regimes are separate. Evidence gathered in the civil investigation can still be relevant to the criminal threshold, so internal notes should be careful, dated and factual. Where doubt exists about knowledge or reasonable cause, take legal advice before responding to enforcement questions to avoid undermining your position.

If you have found yourself facing a possible civil penalty for illegal working, you should immediately seek expert advice. Our legal advisers can help you through the civil penalty process and 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. Early engagement also helps preserve mitigation, for example demonstrating active cooperation and prompt rectification, and can support arguments for a Warning Notice on a first breach where reporting and systems are evidenced. Keep a single point of contact for the case, diarise the fast payment and objection deadlines, and retain proof of any payments or plans agreed with the Home Office.

Section E: Common Grounds for Civil Penalties

While the Home Office operates high risk focus, employers of all sizes and from all sectors remain 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:

1. 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.

Checks need to follow one of the prescribed routes. For British and Irish citizens this can be a manual check or an identity service provider using IDVT. For those with digital immigration status the check is through the Home Office online service using a share code. Where status is pending, the Employer Checking Service can issue a Positive Verification Notice that provides a six month statutory excuse. Photocopies alone, screenshots without the online outcome page, or retrospective checks after the start date do not create protection.

2. 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.

Follow-up checks should be diarised well in advance of expiry and the result recorded. Where an in-time application has been made and evidence is not yet available, an Employer Checking Service request should be submitted and the Positive Verification Notice kept on file. If the notice expires before a decision is received, a new check is needed. Where conditions change, such as a visa that restricts the type of work, any change in role must be reviewed before it takes effect.

3. 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.

The standard is one of reasonableness, not expert detection. Basic checks include comparing the person to the photograph, checking biographical details for consistency, confirming expiry dates and looking for signs of alteration. Where doubt exists, another prescribed method should be used, such as the online service for those with digital status. Staff should be trained on what to look for and when to escalate concerns, and those training records should be retained with the check.

4. 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 the Student route are typically restricted to working 20 hours per week during term time if studying at degree level or above at a sponsor that is a higher education provider, and 10 hours per week where the course is below degree level. Employers should not rely on student declarations of holiday periods without written confirmation from the education provider.

Employers failing to track these limits and subsequently employing students for additional hours risk substantial penalties.

Term time is defined by the sponsoring education provider’s published dates, not by the individual’s timetable. Vacation periods and placement rules differ by course and level, so copies of the provider’s term dates and any placement conditions should be held on file. Self-employment and work as a professional sportsperson or entertainer are not permitted on the Student route, and these conditions should be checked when offering roles or overtime.

5. 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.

Records should show who carried out the check, the date the check was completed, which method was used and what was seen. For online checks the profile page with the photograph and permission details should be saved. For manual checks copies should be clear and unaltered. For IDVT checks the output from the certified provider should be retained. A simple index, centralised storage and periodic audits help ensure documents are complete and retrievable if the Home Office requests them.

Section F: Avoiding 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 before their employment commences, as well as follow-up checks on any existing employees with a time-limited right to work in the UK. The Home Office expects a consistent approach across the workforce to avoid discrimination and to ensure that checks are applied to every new starter regardless of nationality or background.

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 a certified Identity Service Provider (IDSP) through Identity Document Validation Technology (IDVT) for British and Irish citizens only. The appropriate method largely depends on the nationality and immigration status of the prospective or existing employee.

British and Irish nationals can prove their right to work by showing a valid passport, which can be either current or expired, or by using an IDSP where one has been engaged by the employer. 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. If using an IDSP, the employer remains responsible for ensuring the identity details match the person presenting for work.

Foreign nationals holding digital immigration status have to 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 should be carried out prior to employment starting. The check must generate the confirmation page showing the individual’s photo, work conditions and right to work outcome, which should be retained as evidence.

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. The check should be done in the presence of the individual or via a live video link where the original documents are held by the employer at the time of the check. Clear copies of the documents, signed and dated by the checker, should be retained securely for the duration of employment and for at least two years after employment ends.

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 should 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 (PVN) confirming their employment eligibility. A PVN provides a statutory excuse for six months from the date of issue, after which a further check is required if the matter is still outstanding.

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 also have to 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 deadlines apply after a Civil Penalty Notice?

There are two key limits. The fast payment window is 21 days for a first penalty only. The objection deadline is 28 days from the notice date. If the Home Office does not reply to an objection within 28 days, the 28-day appeal window runs from when a reply should have been received. Scotland uses the Sheriff Court.

Can the penalty be reduced with fast payment?

A 30% reduction applies only to a first penalty and only if payment in full is made within 21 days. Instalments are not compatible with the discount. If you object in time and a penalty is maintained, a fresh notice will set a new 21-day window.

What are the recognised mitigating factors?

Two factors can reduce the starting figure by £5,000 each per illegal worker: proactive reporting of suspected illegal working and active cooperation during the investigation. Demonstrating effective right to work systems does not reduce the cash sum, but together with the two factors can result in a Warning Notice on a first breach.

When is a Warning Notice possible?

Only on a first breach within three years, and only where reporting and active cooperation are evidenced and effective right to work systems are shown. Warning Notices are not available for repeat breaches.

Can the Home Office increase the penalty if I object?

At the objection stage the Home Office can cancel, reduce or increase the penalty. If increased, a fresh notice issues. The court on appeal can confirm, reduce or cancel but does not apply fast payment.

What is a statutory excuse?

A statutory excuse protects an employer from civil liability where prescribed right to work checks were completed correctly before employment and repeated on time where permission was time-limited. Evidence of the check and timing is required.

What documents should be kept to prove right to work checks?

Keep clear copies of the documents or the online outcome page with the individual’s photo and permission details, the check date, the method used, and who performed it. For Employer Checking Service results, retain the Positive Verification Notice and diary its expiry.

How long does a Positive Verification Notice protect me?

Six months from the notice date. A follow-up check is needed before expiry if the immigration outcome remains pending.

Can I use an Identity Service Provider (IDSP)?

Yes, for British and Irish passport holders using IDVT. The employer remains responsible for ensuring the person presenting matches the identity verified by the provider. Using an IDSP for other nationalities does not create a statutory excuse.

What happens if I do not pay or respond?

The penalty can be registered with the court for enforcement. Consequences can include a County Court judgment, adverse credit effects and issues for directors. Publication risk also increases once objection and appeal rights are exhausted.

Will a civil penalty affect my sponsor licence?

UKVI may review licence status and take action including downgrade, suspension or revocation. Future licence applications can also be affected where compliance concerns persist.

Are students’ working hours a civil penalty risk?

Term-time limits apply by course level and provider type. Hold the provider’s published term dates and any placement conditions on file and track hours against those limits.

Do TUPE or agency arrangements change liability?

Liability depends on who is the employer at the relevant time. For agency or contractor staff, obtain written confirmation that compliant checks were completed and retain that assurance. If you are the employer, you are expected to hold your own evidence.

How are fines calculated?

The starting point is £45,000 per illegal worker for a first breach within three years, and £60,000 for repeat breaches within three years. Deductions apply only for proactive reporting and active cooperation. Effective systems enable a Warning Notice on a first breach but do not reduce the cash figure.

Will I be named publicly?

The Home Office operates a naming policy. Employers can be listed in defined circumstances, for example non-payment after objection and appeal rights conclude or repeat penalties. Managing deadlines and agreed repayments reduces publication risk.

Can I pay by instalments?

The Home Office may agree instalments, usually up to 24 months, where affordability is evidenced. An instalment plan does not pause objection or appeal deadlines and does not qualify for fast payment.

Section J: Glossary

Section K: Additional Resources & Links