Immigration compliance is an area of reputational risk employers ignore at their peril.
We are seeing increasing instances of well-known organisations facing civil and criminal penalties for breaches of their immigration duties. It seems no organisation is too large or too reputable to avoid Home Office scrutiny.
Employers must meet their duties. Ignorance is no defence to a breach. Employers remain liable even if they were ‘unknowingly’ employing illegal workers.
If you are found to be employing workers illegally, in addition to the punitive Home Office measures, the likelihood is you may also have to deal with the negative impact on your organisation’s reputation.
Your reputation is a highly valuable corporate asset.
Any association with illegal working practices has the potential to cause significant and lasting damage to how your organisation is perceived in the market.
Consider the reactions of each of your stakeholder groups, for example:
- Buyers – your customers / clients may go elsewhere. Can you afford a hit in sales?
- Employees – any association with illegal employment will impact employee morale and your ability to retain and attract talent.
- Shareholders – share prices and brand equity take a hit through loss of confidence.
- Suppliers – suppliers may take this an opportunity to renegotiate trading terms due to a weakened market position.
- Regulators – the impact of a civil penalty can include downgrading or even withdrawal of your sponsor licence, and your ability to hire non-EEA workers. Could you operate without migrant personnel?
- Media – the media remains influential, and much is dependent on how you handle press enquiries and attention, and if or what is published. This may require expertise in crisis communications.
- General public – social media has made a publisher of everyone. How you respond will have a direct impact on how you are perceived.
- Local community – you may face increased cynisim or loss of support resulting in an impact on footfall and business.
- Competitors – expect your competition to take advantage of the opportunity to gain market share from you.
Managing the fall-out of reputational harm requires time, resources and expertise – all in addition to the handling of the penalty itself.
So employers are starting to sharpen their approach to immigration compliance, to prevent any accusation of illegal working arising in the first place.
This means ensuring all areas of global mobility and immigration operations, systems and processes are effective and compliant.
Safeguard your reputation
The commercial reality is, organisations have to find the balance between meeting their duties in a way that is operationally and financially viable.
Undertaking an immigration audit is highly effective in identifying areas of risk and recommendations to address potential or actual breaches, before the Home Office exercises its powers to investigate compliance.
For example, one common area of compliance risk relates to List B employees, that is, those employees who and staying informed of the changing status of personnel with time-limited permission to work in the UK.
Minimsing the reputational damage of a civil penalty
If you receive a civil penalty notice for illegal employment, panic may well set in. The prospect of dealing with the Home Office can be hugely daunting, and the need to resolve the issue with minimal financial and reputational impact is critical.
You may feel under pressure to settle quickly to make the matter ‘go away’. But this may not always be the best strategy for your organisation.
You need to decide which is the best course of action to take for your organisation. Given what is at stake, it is advisable to seek professional advice on the merit of your case.
If you are in breach, it will likely be a case of making the payment, seeking to negotiate more favourable terms, while limiting the potential for reputational damage.
There may however be grounds for you to object to the penalty notice and challenge the civil penalty, relying on the statutory excuse with a view to having the fine dismissed.
Irrespective of the route you take, a civil penalty should result in steps being taken to rectify issues and areas of risk within your organisation to avoid further civil and criminal penalties, and future breaches.
DavidsonMorris’ team of business immigration lawyers have substantial experience in all aspects of immigration compliance and prevention of illegal working. Whether you are facing Home Office enforcement action, or are taking a proactive approach to avoiding compliance breaches, we can help.
Last updated: 12 November 2020