Have you received a Civil Penalty for Employing Illegal Workers?
You are Not Alone
Civil penalties are a huge source of revenue for the Home Office, with the total monetary value of civil penalties exceeding £10,000,000 in the first three months of 2017. More than half of these penalties were issued in London and the South East of England against small businesses.
On average, the Home Office issues 220 civil penalties per month against businesses across the UK.
It only takes one illegal worker being employed for any amount of time for the Home Office to impose a £20,000 penalty on the owner of the business.
Civil Penalties Damage Business
A civil penalty can result in a business being forced to cease trading.
As well as the obligation to pay a hefty fine, a civil penalty may result in criminal prosecution, enforced debt action, a County Court judgment, Tier 2 Sponsor Licence revocation, an adverse impact on the ability to obtain future credit, and disqualification of company directors.
The Home Office publish an annual list of all the names of UK businesses who have been issued with civil penalties. This can result in negative press coverage, a fall in profits, and a loss of credibility and reputation.
What do I do if I have received a Civil Penalty?
Once being issued with a civil penalty, you have three options:
- You can object against the civil penalty;
- You can make a request to the Home Office to set up a payment instalment plan; or
- You can pay the penalty in full.
The Home Office has a strict 28 day deadline that applies to all of the above options and there is no option to extend this.
It is crucial at this stage to obtain specialised legal advice as it is within the Home Office’s rights to issue an increased civil penalty in response to receiving an objection.
Stage 1 – Information Request
- The Home Office may conduct an unannounced site visit of your business premises after receiving an anonymous tip-off that illegal workers are employed on the premises. This tip-off could originate from a disgruntled employee or unhappy customer, and the Home Office is entitled to conduct a site visit without holding concrete evidence of illegal working taking place.
- At the site visit, the Home Office will gather evidence of illegal working and then make a referral to the Civil Penalty Compliance Team.
- Upon receipt of the referral and assessing the information, the Civil Penalty Compliance Team will issue an Information Request requesting the following information:
- Confirmation as to whether you are the employer of the workers identified. If this is not so, details are requested of the business who is 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 be given 10 days to return the completed Information Request Response Form and supporting documents.
The response to the Information Request plays a decisive role in the level of civil penalty issued and therefore instructing expert legal representation to prepare a detailed response is crucial at this stage.
- The Civil Penalty Compliance Team will expect you to complete only the required information in the Response Form, and does not give you the opportunity to argue against the allegations.
- We advise that representations providing a detailed defence against each allegation be submitted alongside the Response Form.
Stage 2 – Civil Penalty
- Upon receipt of the response to the Information Request, the Civil Penalty Compliance Team consider 4 criteria when determining the level of civil penalty to issue.
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.
- A Civil Penalty is issued by the Civil Penalty Compliance Team. You will have 28 days to make full payment, set up an instalment plan, or object to the penalty.
- If you have not been found to be employing illegal workers within the last 3 years, you may be provided with the Fast Payment Option in your Civil Penalty Notice which entitles you to a 30% reduction in the penalty if payment is made in full within 21 days of the Civil Penalty Notice issue date.
- As the owner of a business, you will need to decide whether it is worth outlaying the costs on instructing legal representation to object against the Civil Penalty or whether you should pay the penalty.
- This decision will depend on whether there are strong grounds to object against the allegations in the Civil Penalty Notice, which will result in the penalty being reduced.
DavidsonMorris provides a fixed fee assessment at Stage 1 and Stage 2 of the Civil Penalty process, enabling you to determine which option will result in minimal financial loss for your business.
Do Not Delay and Contact DavidsonMorris Today
If you have received an Information Request or Civil Penalty, please contact a member of our Civil Penalties Team on 020 7494 0118 or at firstname.lastname@example.org
The level of Civil Penalty issued directly results from the speed and level of your co-operation with the Home Office