Fine for Employing Illegal Workers

Section A: What is a Civil Penalty Fine for Employing Illegal Workers?

A civil penalty for illegal working is a financial sanction imposed on UK employers that employ adults who are subject to immigration control and either have no permission to work or are working in breach of their conditions. The regime is created by section 15 of the Immigration, Asylum and Nationality Act 2006, supported by statutory codes of practice that explain when penalties apply and how the Home Office calculates the amount.

The scheme applies across the UK and is designed to make employers responsible for preventing illegal working through right to work checks. An employer becomes liable where an illegal worker is found in their workforce and they cannot show that the prescribed checks were carried out correctly. In that situation the Home Office can issue a civil penalty notice, even if the business had no idea that the individual lacked permission to work.

From 13 February 2024, penalty levels under section 15 were substantially uplifted. A first breach can now attract a civil penalty of up to £45,000 per illegal worker, while repeat breaches within three years can lead to penalties of up to £60,000 per worker, before any discounts or mitigation are applied. These figures represent the upper end of the scale; the actual penalty is set by reference to the Code of Practice, taking into account factors such as previous history and cooperation with the investigation.

Employers are not left without protection. The legislation provides a statutory excuse where the organisation can show that it carried out right to work checks in the way prescribed in the guidance. If compliant checks were completed before employment started and, where relevant, repeated on time for workers with time-limited permission, the employer should not be liable for a civil penalty, even if the individual is later found to have no right to work.

Civil penalties sit alongside a separate criminal offence for employers that knowingly employ people who are not allowed to work in the UK or have reasonable cause to believe that is the case. Where the knowledge or reasonable belief test is met, the employer can face prosecution with a maximum sentence of up to five years’ imprisonment and an unlimited fine, in addition to any immigration enforcement action against the workers themselves.

The financial risk is only part of the picture. A civil penalty for illegal working can trigger sponsor licence reviews and potential suspension or revocation, create problems for future Home Office applications and lead to inclusion on public naming lists that record employers who have failed to comply with the scheme. Understanding the nature and level of the penalty at an early stage helps frame the organisation’s response and informs whether to pay, object or prepare for a wider compliance reset.

Wider consequences of an illegal working fine

A civil penalty rarely operates in isolation. It becomes part of the organisation’s immigration compliance history and can influence a wide range of Home Office decisions. Employers holding a sponsor licence are particularly exposed. A civil penalty is treated as evidence of systemic failure and can lead to immediate suspension, restrictions on assigning Certificates of Sponsorship or revocation of the licence. Even where revocation is avoided, the penalty is likely to be considered in future renewal applications and during routine or unannounced compliance visits.

The reputational impact can be equally significant. The Home Office publishes quarterly lists of employers that have received civil penalties and meet the criteria for public naming. Once published, the information is publicly accessible and frequently reported in local and sector-specific press. For regulated organisations or businesses with large procurement clients, public naming can affect tender outcomes, investor confidence and customer relationships. It also places additional scrutiny on future recruitment and compliance activities within the organisation.

There are also operational consequences. A civil penalty increases the likelihood of intensified monitoring and more frequent site visits. It may affect the Home Office’s approach to any future immigration applications involving the organisation, whether for sponsored workers, business visitors or senior personnel. In some cases it can also feed into director disqualification proceedings or regulatory reviews where compliance forms part of the assessment of fitness and propriety. The effect is cumulative and long-lasting, particularly where a penalty is followed by further breaches within the three-year repeat-breach window.

Section B: Received a Fine for Employing Illegal Workers? What Next?

Receiving a civil penalty notice creates an immediate need to assess liability, understand the evidence relied on by the Home Office and decide quickly whether to pay or challenge. The notice will set out the alleged breach, the level of penalty and the date by which you need to act. The timeframe is short. Employers generally have 28 days from the date specified in the notice to either pay the penalty, agree instalments with the Home Office or submit a formal objection. Objecting preserves your right to appeal later and prevents the penalty becoming enforceable while the objection is being considered.

As you would expect, the Home Office encourages employers to accept fines, and encourages fast resolution with a 30 percent reduction where a first-time penalty is paid in full within 21 days. This discount does not apply to repeat penalties and it is not available if payment is made through instalments. The fast payment incentive can be useful but it needs to be considered alongside the strength of the underlying case. Once payment is made, the Home Office generally treats the matter as closed, so employers need to be confident they do not have grounds for a statutory excuse or for arguing that the penalty is too high.

Where the Home Office has misapplied the Code of Practice, overlooked evidence or assigned liability incorrectly, employers can object to the notice on one or more of the statutory grounds. The objection process requires a structured written response supported by evidence such as the right to work file, recruitment records, internal policies, training materials and any documents submitted before or during the investigation. Because the Home Office can increase as well as reduce or cancel the penalty at this stage, the objection needs to be carefully drafted to avoid drawing attention to issues that could justify an uplift in the amount.

Where the evidence suggests that a breach did occur, paying the penalty and addressing the process failures that led to it may be the most practical step. The Home Office retains records of all civil penalties, and repeat breaches within three years attract higher maximum penalties, so it is important to understand what went wrong and to take action to strengthen right to work systems. A civil penalty also increases the likelihood of an unannounced compliance visit, so any internal weaknesses should be addressed promptly.

If the Home Office maintains the penalty after considering the objection, the employer can then appeal to the County Court, or the Sheriff Court in Scotland. The deadline is usually 28 days from the date of the Objection Outcome Notice. A court appeal results in a fresh look at the case and can involve the consideration of material that the Home Office did not previously review, although many matters settle before reaching a hearing.

Deadlines and procedural requirements

Once a civil penalty notice is issued the timetable becomes fixed, and missing deadlines can close off challenge routes completely. Employers have 28 days from the date specified on the notice to respond. Within that window they must decide whether to pay, agree instalments or submit a formal objection. Payment settles the matter unless the employer has grounds to request a reassessment. An objection preserves the right to appeal later and pauses enforcement while the Home Office reviews the case. Because the statutory clock starts running immediately, organisations need to move quickly to gather evidence and take advice.

The objection process is not informal correspondence. It requires a structured written submission that addresses the specific statutory grounds and includes relevant evidence. The Home Office reviews the objection and can cancel, reduce or increase the penalty. If the penalty is maintained or amended, the employer then has a further 28 days from the date of the objection outcome to issue a court appeal. The appeal is brought in the County Court, or the Sheriff Court in Scotland, and involves a fresh examination of the facts and the application of the statutory scheme to the evidence. The court can cancel or reduce the penalty but cannot apply the fast-payment discount.

The timeframes matter because civil penalties sit within a wider enforcement environment. The Home Office expects employers to act promptly and to present coherent evidence that matches the prescribed requirements. Submissions that are late, incomplete or off-point are likely to be dismissed. The deadlines also have practical implications for internal coordination. HR teams, compliance personnel and external advisers need to work within the same 28-day cycle, often while dealing with disrupted records or urgent operational issues caused by the penalty. Managing these procedural steps efficiently is crucial to protecting the employer’s position.

Section C: Paying the Fine

In some cases the most realistic option is to pay the civil penalty rather than pursue a challenge. That decision still needs to be taken carefully because the way you pay, and when you pay, affects the total amount, your ability to argue later and how the Home Office records the outcome. Payment is not simply a finance function. It is a strategic step that closes off some routes and shapes how future breaches and sponsor licence decisions are handled.

Where you decide not to object, or where an objection has been considered and the penalty is maintained, payment is due by the date on the notice. For a first civil penalty there may be a fast payment reduction if you pay the full amount within the specified period, usually 21 days from the date of the notice. That reduction does not apply to repeat penalties and is not available if you pay by instalments. Once the fast payment window passes, the full amount becomes payable, although you can still ask to spread payments over time if cashflow is an issue.

Paying in full without objection usually brings the matter to an end from an enforcement perspective, but it leaves the original findings intact. The Home Office will treat the breach as accepted and record the penalty on its systems. That record is taken into account when assessing whether a later penalty is a repeat breach within three years and when considering sponsor licence applications or renewals. Payment also does not prevent the Home Office from naming the business publicly where the criteria for publication are met.

Agreeing instalments can help manage the immediate financial impact but has similar long-term implications. The underlying liability remains, and the civil penalty still forms part of your compliance history. If you default on instalments, the Home Office can pursue enforcement action through the courts and is more likely to treat any further breaches as evidence of systemic non-compliance. For sponsors, a default on instalments can be an additional trigger for closer scrutiny of the licence.

The key question is whether there is a credible basis to rely on one of the three statutory grounds. If you have evidence that you were not liable, that a statutory excuse applies or that the penalty has been set too high under the Code of Practice, paying without challenge is rarely advisable. Where the evidence is weak and the risk of an increased penalty on objection is real, paying quickly to secure the fast payment discount and then focusing on strengthening right to work systems may be the safer course. Either way, the payment decision should follow a structured assessment of the facts, the grounds and the wider impact on your sponsor licence and Home Office profile, not just a narrow focus on immediate cost.

Section D: Challenging a Civil Penalty for Illegal Working

The law gives employers defined grounds to challenge a civil penalty for illegal working. In broad terms you can argue that you are not liable at all, that you have a statutory excuse because right to work checks were carried out correctly, or that the penalty level is too high because the Home Office has not applied the Code of Practice and mitigating factors properly. Each ground relies on evidence, so the starting point is to assemble the right to work file, recruitment documents, internal policies and any correspondence with the Home Office before deciding how to frame the objection or appeal.

1. You are not liable for the penalty

The first route is to show that you should not have been issued with a penalty at all because the legal test for liability is not met. Section 15 applies only where you employ an adult who is subject to immigration control and who either has no permission to work or is working in breach of their conditions. If the individual was not employed by your organisation, was under 16, was not subject to immigration control or did in fact have the right to work at the relevant time, the basic requirements for a civil penalty are missing. A challenge on this ground usually focuses on employment status, dates of employment and the person’s actual immigration position, supported by contracts, payroll and Home Office records.

Disputes about which entity is the employer are common in group structures, franchise networks and labour supply chains. Where you can show that another business engaged and paid the worker, and that you did not employ or apprentice them, that evidence should be set out clearly. You can also raise cases where the Home Office has relied on incorrect or incomplete status information, for example where leave was extended under section 3C or where a status check response was later corrected. The key is to show that the statutory conditions for liability are not satisfied on the facts.

2. You have a statutory excuse based on right to work checks

The second main ground is that you have a statutory excuse because you carried out right to work checks in the prescribed way. If you can show that you followed the Home Office guidance for manual document checks, the online right to work service or an authorised identity service provider, and that checks were done before employment started and repeated on time for workers with time-limited permission, you should not be liable for a civil penalty even if the individual is later found to be working illegally.

This defence relies heavily on documentation. You will need to produce the records of the original check, including copies or screenshots that meet the guidance requirements, along with evidence of the date the check was carried out and who completed it. For time-limited permission you also need proof of any repeat checks carried out before the previous grant expired. If you can show that the checks met the standard in place at the time, the Home Office should cancel the penalty or, at objection stage, convert it to a warning rather than a financial sanction.

In your objection it can be helpful to set out your wider right to work processes, especially where the alleged failure relates to a single worker against a backdrop of otherwise compliant checking. Training materials, documented procedures and internal audits all support an argument that you acted in line with the regime. Where there are gaps in the check record, you will need to consider carefully whether you can still argue that the statutory excuse applies or whether the safer approach is to focus on mitigation.

3. The penalty amount is too high

Even where liability is accepted and there is no complete statutory excuse, you can still object on the basis that the penalty level is too high. The Code of Practice sets out a structured approach to calculating the amount, with starting figures of up to £45,000 per worker for a first breach and £60,000 per worker for repeat breaches within three years. That starting point should then be adjusted for factors such as previous compliance history, whether you reported suspected illegal working in advance, and the extent of cooperation with the investigation.

Your task is to show that the Home Office has not applied the Code correctly. For example, you may be entitled to a reduction because you reported concerns using the employer reporting line before enforcement action, or because you have not received a civil penalty in the previous three years. You can also argue that a warning notice would have been appropriate if this is the first time the business has faced allegations of illegal working and you can evidence credible right to work systems. Where the Home Office has miscounted workers, used the wrong breach category or failed to apply a mandatory reduction, you should spell this out and propose a corrected figure.

4. Procedural and wider arguments

Alongside the formal grounds, employers often raise concerns about how evidence was gathered and whether the Home Office exercised its powers fairly and proportionately. Examples include reliance on interviews conducted without an interpreter, failure to consider documents provided during the investigation, or inconsistent treatment compared with previous cases. These points usually sit under the heading that the penalty is too high or that issuing a penalty at all was inappropriate in the circumstances rather than forming a separate legal ground, but they can still carry weight, especially where the facts are finely balanced.

In more serious cases, or where there are systemic issues with the way an investigation was handled, it may be appropriate to consider judicial review alongside or instead of an appeal, although that is a specialist route. For most employers the focus will be on using the statutory objection and appeal framework to cancel or reduce the penalty and to protect their sponsor licence and wider Home Office profile. The best outcomes tend to come where the challenge is structured around the three recognised grounds, supported by clear evidence and framed in a way that shows the business has learned from any failings and strengthened its processes going forward.

Section E: Practical Considerations When Deciding Your Strategy

Once a civil penalty notice is issued the temptation is to react immediately, but the decision to pay or challenge needs to be taken in a structured way. The Home Office will not revisit the matter unless you follow the proper channels, and ignoring the notice or missing deadlines only makes the situation worse. Late engagement leads to enforcement action, removal of the fast payment reduction, and a higher likelihood of being named publicly. The starting point is to recognise that the clock is already running and that delay reduces your options.

Any organisation thinking about challenging a penalty needs to be realistic about the time, resources and coordination involved. An objection or appeal is evidence-driven. It requires input from HR, recruitment teams, line managers and compliance personnel, often across multiple sites or business units. You will need to gather documents quickly, including right to work files, onboarding records, payroll information, policies, training materials and internal communications. If these are dispersed, incomplete or inconsistently kept, pulling them together takes time. For that reason, the decision to challenge should be taken early so that the evidence can be assembled before the statutory deadlines.

You should also consider the risk of a higher penalty. The Home Office is entitled to increase the amount when reviewing an objection if it identifies errors or factors that justify an uplift under the Code of Practice. That does not happen routinely, but it is a real possibility where the organisation presents weak arguments, exposes wider failings or provides material that contradicts earlier submissions. A challenge needs to be carefully drafted so that it focuses on points that genuinely fall within the recognised grounds and does not inadvertently invite the Home Office to scrutinise issues that could justify a higher category of breach.

Internal capacity is another practical consideration. Managing an objection or appeal while maintaining day-to-day operations can stretch already-busy teams. Senior personnel may need to be interviewed. Managers may be asked to explain why checks were missed or recorded poorly. HR and compliance teams may find themselves working to tight internal deadlines to meet the statutory timeframe. Where resources are limited, you need to assess whether the organisation can handle the additional administrative pressure without risking a late or weak submission.

Cashflow may also influence strategy. A fast payment reduction is only available for first-time penalties and only where the full amount is paid within the 21-day window. If the evidence for a challenge is thin, paying quickly and securing the reduction can be the financially sensible option. The full-payment route also avoids the risk of the penalty being increased at objection stage. However, once paid, the underlying breach remains on your Home Office record, so you need to balance short-term savings against long-term compliance impact.

For sponsor licence holders, reputational and operational considerations carry particular weight. A civil penalty can trigger licence suspension, restrictions on assigning Certificates of Sponsorship or revocation. If the penalty is linked to systemic failings rather than a single error, the Home Office may see it as a sign that wider compliance issues exist. In these cases a challenge may be necessary, not only to reduce or cancel the penalty but to demonstrate that the organisation is engaging seriously with right to work requirements and has credible plans to improve. The decision therefore needs to take into account sponsor-licence strategy, upcoming renewals and the risk of increased compliance visits.

The final element is future-proofing. Whether you decide to pay or challenge, the organisation will need to review and update its right to work processes to reduce the risk of repeat breaches. Repeat penalties within three years attract higher maximum fines, and the Home Office will scrutinise what corrective action you took after the first breach. Any decision now should therefore be tied to a wider plan to strengthen systems, training and documentation so that the business is not left exposed again.

In short, the decision is not simply “pay or challenge”. It is a wider assessment of legal risk, organisational capacity, sponsor-licence implications, cashflow, reputational concerns and long-term compliance. The right strategy is the one that protects both your immediate position and your Home Office standing over the longer term.

Section F: Summary

The civil penalty regime for illegal working places direct responsibility on UK employers to prevent unlawful employment through compliant right to work checks. Since February 2024 the financial exposure has increased sharply, with penalties of up to £45,000 per worker for a first breach and £60,000 for repeat breaches, alongside the risk of criminal prosecution where an employer knew or had reasonable cause to believe a person could not work. A civil penalty also carries wider consequences, including sponsor licence action, a damaged Home Office record and potential public naming.

Employers that receive a civil penalty notice have limited time to decide whether to pay, object or appeal. The law provides three main grounds to challenge: not being liable at all, having a statutory excuse based on compliant right to work checks, or arguing that the penalty is set too high under the Code of Practice. Each route depends on evidence, from right to work files and recruitment records to internal policies and training materials. Taking early advice, assessing the strength of the case and addressing any weaknesses in right to work systems are central to protecting both the immediate position and longer term immigration compliance.

Section G: Need Assistance?

The expense, time and energy required to object and appeal a decision may seem daunting, but if a business receives a civil penalty UK immigration notice, there are significant consequences and many reasons to appeal a civil penalty for immigration. Given what is at stake, all civil penalties should be taken seriously. If a business decides to object or appeal a decision, these applications must be well prepared, with detailed submissions and supporting evidence.

We are experienced advisers to employers defending fines for illegal working. We will assess the merit of your case against Home Office evidence and advise on an appropriate course of action for your specific circumstances. For more information on civil penalties for illegal employment, please get in touch.

Section H: Fine for Employing Illegal Workers FAQs

What are the fines for employing illegal workers in the UK?

From 13 February 2024 employers can face up to £45,000 per worker for a first breach and up to £60,000 per worker for repeat breaches within three years. The final amount depends on the Code of Practice, mitigation and compliance history.

Can an employer be fined even if they did not know the worker was illegal?

Civil penalties apply on a strict basis unless you can show a statutory excuse. If right to work checks were not carried out correctly, liability can still arise even where the employer genuinely believed the worker was allowed to work.

Is there a criminal offence for hiring illegal workers?

Employers who knew or had reasonable cause to believe someone was not allowed to work can face prosecution. The offence carries up to five years’ imprisonment and an unlimited fine. This sits alongside the civil penalty regime.

How does an employer check someone’s right to work?

Employers should carry out checks using the methods permitted by Home Office guidance. Depending on the individual’s status this may involve a manual document check, the online right to work service or an identity service provider. Evidence needs to be kept in the prescribed format.

Do right to work checks need to be done before employment starts?

Checks should be completed before employment starts or, at the latest, on the worker’s first day. For time-limited permission, repeat checks need to be carried out before the previous grant expires.

Can an employer challenge a civil penalty?

Employers can object to the Home Office within 28 days on the grounds that they are not liable, that they have a statutory excuse or that the penalty is too high. If the Home Office maintains the penalty, it can be appealed to the County Court or Sheriff Court.

What evidence is needed to defend a penalty?

Typical evidence includes right to work files, copies or screenshots of checks, contracts, payroll records, recruitment documents, internal policies, training records and any correspondence with the Home Office. The objection or appeal needs to be supported by this material.

Will a civil penalty affect a sponsor licence?

A civil penalty is a compliance failure and can lead to suspension, downgrade or revocation of a sponsor licence. It also impacts future licence applications and renewals. The Home Office may increase unannounced visit activity following a penalty.

Can a business be publicly named for employing illegal workers?

The Home Office publishes quarterly lists of businesses that have been issued with penalties and meet the naming criteria. Public naming can cause reputational harm and may affect commercial relationships.

What happens if an employer discovers a worker has no right to work?

The employer needs to stop the illegal working immediately and assess whether reporting the issue to the Home Office is appropriate. Reporting can be a mitigating factor, but advice is recommended to avoid creating further risk.

Are self-employed individuals covered by the civil penalty regime?

The current regime applies to employment and apprenticeships. However, issues arise where someone labelled self-employed is in fact working as an employee or worker. Draft legislation is expected to extend the regime to non-employees and platforms, so businesses using contractors should monitor developments.

Can a civil penalty be paid in instalments?

Instalment arrangements can be agreed with the Home Office, but they do not qualify for the 30 percent fast payment reduction that applies only to full payment of first-time penalties within 21 days.

Does a civil penalty stay on record?

Penalties remain on the Home Office compliance record and influence how future breaches are treated. A repeat breach within three years attracts higher maximum penalties, so strengthening processes after a penalty is essential.

Section I: Glossary

Section J: Additional Resources & Links