Penalties for Employing Illegal Workers

Section A: What Are the Penalties for Employing Illegal Workers?

Every UK employer is legally required to check that every worker they employ has the right to work in the UK before employment starts. The law applies to all organisations, regardless of size or sector. Under the Immigration, Asylum and Nationality Act 2006, the Home Office can impose a civil penalty if an employer is found to have employed a person who does not have permission to work, or to carry out the work in question.

The civil penalty regime is enforced by the Home Office Civil Penalty Compliance Team, which investigates employers through compliance visits, data sharing with HMRC and Border Force or intelligence-led inspections. It does not matter whether the breach was intentional or due to administrative failure. If right to work evidence cannot be produced, the employer is treated as being in breach of their legal duties.

The financial penalties are severe. The maximum fine for employing an illegal worker is £45,000 per worker for a first breach and £60,000 per worker for repeat breaches. These levels were increased significantly in 2024 to reflect the government’s policy of deterrence through financial enforcement.

There is a 30% early payment reduction for a first civil penalty if the full amount is paid within 21 days of the date of the Civil Penalty Notice. This Fast Payment Option cannot be used with instalment plans, although the Home Office may agree instalments for the full, undiscounted amount.

The penalty is issued in the form of a Civil Penalty Notice, which sets out the alleged breach, the number of affected workers and the calculation of the fine. Employers have 28 days from the date of issue to object if they dispute liability, the amount or the circumstances of the alleged breach. If no objection is made within that period, the penalty becomes enforceable as a civil debt.

Once a civil penalty is issued, the Home Office will also usually review the employer’s broader immigration compliance position. For organisations holding a sponsor licence, a penalty can trigger licence suspension or revocation, which in turn affects the immigration status of all sponsored workers. Even where a licence is retained, the incident is recorded on the sponsor’s compliance history and can affect future renewals or applications for defined Certificates of Sponsorship.

Beyond immigration compliance, the reputational consequences can be significant. The Home Office has powers to publish the names of employers fined for illegal working, and media coverage can cause lasting damage to brand trust, client relationships and recruitment. For regulated sectors such as care, financial services or education, a civil penalty can also prompt further scrutiny from regulators and professional bodies.

In more serious cases, or where there is evidence of deliberate conduct, the breach can escalate from a civil matter to a criminal offence under section 21 of the 2006 Act. If an employer is found to have knowingly employed someone without permission to work, or to have had reasonable cause to believe they did not have that permission, the penalties increase dramatically. Criminal conviction can lead to an unlimited fine and up to five years’ imprisonment for those involved, including company directors and managers.

Taken together, the penalties for illegal working reach well beyond the financial sanction. They can affect operational continuity, workforce stability, commercial contracts, and future Home Office dealings. The expectation is that employers are audit-ready at all times, able to demonstrate full right to work compliance through accurate, retained evidence. In the current enforcement climate, the Home Office is using civil penalties as both a deterrent and a trigger for wider investigation into employer compliance practices.

Section B: Civil Penalty Fines for Employing Illegal Workers

A case usually starts when the Home Office identifies a potential breach through an inspection, intelligence report or data exchange with HMRC or other agencies. Officers will visit the premises or contact the employer to review right to work documentation and interview staff. If the evidence suggests a breach, the employer is first issued with an Information Request. This gives an opportunity to submit proof of compliance, such as copies of right to work checks, employment contracts, and identification documents.

1. How Fines are Calculated

The fine amount depends on several factors. The Home Office applies a structured calculation that considers the number of workers involved, whether the employer has a previous breach, and the existence of any mitigating evidence. The statutory maximums are £45,000 per illegal worker for a first breach and £60,000 for a repeat breach. Discounts can apply where the employer self-reported suspected illegal working before discovery, cooperated fully with the investigation or, for a first breach, can demonstrate effective right to work systems that justify a Warning Notice instead of a financial penalty.

The penalty is cumulative, meaning that employing multiple illegal workers can lead to six-figure sums. Where the Home Office determines that a statutory excuse applies, the penalty is cancelled entirely. If no statutory excuse exists, the notice will confirm the total fine and payment terms. For a first civil penalty, early payment within 21 days of the notice date reduces the total by 30%.

2. Civil Penalty Triggers

Civil penalties are most often triggered by one of three scenarios. The first is a failure to conduct a compliant right to work check before employment starts. The second is employing someone whose visa or permission has expired, without conducting a repeat check or follow-up. The third involves inadequate record keeping, where a check may have been done but the employer cannot produce the evidence when requested.

It is not necessary for the Home Office to prove intent. Liability arises automatically if the employer cannot evidence a valid statutory excuse, even if the employment was short-term, unintentional, or arranged by a third party. This wide scope reflects the government’s zero-tolerance policy on illegal working.

3. Objection & Appeal Routes

An employer who disagrees with a civil penalty has 28 days from the date of the notice to file an objection with the Home Office. The objection can challenge the existence of the breach, the amount of the fine, or the procedure used. Evidence must be submitted to show why the penalty should be reduced or cancelled. Common grounds include proof that right to work checks were completed correctly, that the person was not actually employed, or that the penalty was calculated incorrectly.

If the objection is unsuccessful, the employer can appeal to the County Court within 28 days of the objection decision notice. The appeal process is legal rather than administrative and can be costly, so it is generally reserved for cases with strong evidence or principle at stake. During the objection and appeal process, the penalty remains suspended, but interest and enforcement can follow if deadlines are missed.

Employers who ignore a civil penalty notice risk debt recovery proceedings and enforcement action, including the use of bailiffs and registration of the debt in the County Court. Failure to pay or respond can also affect the organisation’s standing with the Home Office, particularly if it holds or later applies for a sponsor licence.

The Home Office treats penalty data as a compliance intelligence tool. Repeat breaches and non-payment are escalated for further investigation and can influence the treatment of future applications or inspections. For this reason, it is important for employers to treat any notice seriously and respond promptly, even where they believe the decision is unjustified.

Section C: Sponsor Licence Consequences

A civil penalty for illegal working carries serious implications for any organisation that holds, or intends to apply for, a sponsor licence. The Home Office treats such penalties as evidence of systemic failure in immigration compliance and will review the organisation’s sponsor status as part of its wider enforcement response. Even where the breach concerns non-sponsored staff, it raises questions about the sponsor’s ability to discharge its duties effectively.

When a penalty is issued, the Home Office typically conducts a sponsor compliance review. This may involve a further inspection, document requests, or a review of the sponsor’s licence history. If the penalty indicates widespread or repeated failings, the Home Office can suspend the licence while it decides whether to downgrade, revoke, or retain it under close monitoring. During suspension, the organisation cannot assign new Certificates of Sponsorship and risks losing existing sponsored workers if revocation follows.

Licence revocation has immediate and far-reaching effects. All sponsored workers’ visas are curtailed, usually within 60 days, and the business may struggle to continue operations where key staff are affected. The Home Office records revocations and penalties on internal systems, meaning any future licence application is likely to face additional scrutiny or refusal for a defined period. A repeat breach can also result in a cooling-off period before a new licence application is considered.

For current sponsors, even a single penalty can influence the outcome of renewal applications. The Home Office assesses whether the organisation remains suitable to hold a licence, with compliance history a decisive factor. Penalties are taken as evidence of poor systems, inadequate training, or lack of oversight by key personnel. Sponsors are expected to show remedial action through documented policy improvements, refresher training, or the introduction of independent audits to restore Home Office confidence.

In practical terms, a civil penalty often triggers a chain of administrative and operational consequences beyond the immediate fine. The Home Office may place the sponsor on enhanced monitoring or require evidence of improved right to work procedures before allowing continued sponsorship. For employers reliant on overseas recruitment, the loss or downgrading of a licence can delay projects, disrupt client delivery, and damage workforce stability.

The key message for licence holders is that a civil penalty is not an isolated event but a red flag to the Home Office that compliance controls may be inadequate. Taking immediate corrective measures, supported by independent audit evidence, is critical to protecting licence integrity and minimising the risk of further enforcement action.

Section D: Criminal Sanctions & Director Liability

While most illegal working cases are dealt with under the civil penalty regime, certain circumstances can lead to criminal prosecution. The dividing line is intent. Where an employer is found to have knowingly employed someone without the right to work, or had reasonable cause to believe that the person did not have that right, the case moves from civil to criminal enforcement under section 21 of the Immigration, Asylum and Nationality Act 2006.

The criminal offence applies to both organisations and individuals responsible for the employment decision. It captures not only direct acts of recruitment but also indirect involvement, such as managers who approve payroll entries or HR leads who ignore expired visas. If the prosecution can prove knowledge or deliberate disregard, the penalties are far more serious than the civil regime. Conviction can result in an unlimited fine and imprisonment for up to five years.

The Home Office and the Crown Prosecution Service decide together whether a case meets the criminal threshold. Evidence typically includes written correspondence showing awareness of an employee’s immigration status, internal warnings ignored by senior staff, or deliberate attempts to falsify right to work records. In practice, criminal cases are reserved for employers who display patterns of knowing non-compliance or who profit from illegal labour, particularly in high-risk sectors such as construction, hospitality and care.

Company directors and officers can also face personal liability. Under section 22 of the 2006 Act, a director, manager or company secretary who consents to or participates in the offence can be prosecuted individually. Personal prosecution does not depend on the company itself being convicted, and it can lead to both imprisonment and disqualification from acting as a director. This risk extends to partners in limited liability partnerships where the breach arises from collective business decisions.

For regulated businesses, a criminal finding can also trigger referral to professional bodies or regulators. Licensing authorities, financial regulators and sector inspectors can impose further sanctions, from licence withdrawal to fit and proper person disqualification. Insurance policies generally exclude cover for deliberate criminal acts, leaving individuals and businesses to bear legal defence and penalty costs in full.

The reputational harm following criminal prosecution is lasting. Court outcomes are a matter of public record and often reported by local or national media. For directors, the presence of a criminal record or ongoing investigation can restrict access to finance, public contracts and senior roles.

Although criminal enforcement remains less common than civil penalties, the Home Office has expanded its use of joint enforcement operations and data matching to detect deliberate illegal working. The message is clear: employers are expected to take active steps to prevent illegal employment, not simply rely on ignorance or delegation as a defence. Robust right to work systems and clear escalation routes for visa expiry or document concerns are the only real protection against both civil and criminal liability.

Section E: Wider Implications for Employers

The effects of a civil penalty often extend far beyond the immediate fine. The Home Office views illegal working as a serious compliance breach, and a penalty can create a cascade of reputational, financial, and operational consequences. Even where an organisation pays promptly and avoids escalation, the longer-term impact on credibility and internal governance can be considerable.

1. Reputational Damage

The Home Office has the power to publish the names of employers fined for illegal working. This information is often picked up by the press or professional watchdogs, particularly in regulated industries such as healthcare, hospitality and financial services. Once published, the association with illegal working can persist online, damaging brand reputation and trust with clients, investors and partners. For some organisations, a single penalty can lead to termination of supply contracts or exclusion from tender processes that require evidence of clean compliance records.

2. Operational and Commercial Impact

A civil penalty can disrupt business continuity, particularly where a sponsor licence is suspended or revoked. Key staff may lose immigration status, operations may slow, and recruitment plans may stall. Where breaches are discovered across multiple sites, the Home Office may conduct wider inspections, diverting management time and resources. Some sectors also face loss of sector-specific licences or additional scrutiny from regulators.

Financially, the cost extends beyond the fine itself. Employers are liable for their own legal fees during objections or appeals, and cannot recover lost productivity. Fines are not tax-deductible, as HMRC classifies them as penalties for unlawful conduct. Insurers typically exclude coverage for deliberate or unlawful acts, so there is rarely any external financial protection.

3. Governance and Reporting Risk

Civil penalties can also trigger corporate governance issues. Boards and auditors may require disclosure of the penalty as a contingent liability or event after the reporting period. Repeated breaches could draw attention from auditors or regulators regarding management oversight and risk control. For listed or regulated entities, any enforcement action may need to be reported to shareholders or supervisory authorities.

The reputational and commercial implications tend to endure long after payment of the fine. Penalties become part of the organisation’s Home Office compliance record and may be cited in future sponsor licence renewals, visa applications or government tenders. The underlying issue is one of credibility. A business shown to have breached immigration law, even once, faces closer scrutiny in all subsequent dealings with UK authorities.

The broader message is that illegal working penalties operate as a compliance signal within and beyond the immigration system. They shape how regulators, clients and government departments perceive an employer’s integrity and risk management culture. For employers, that means the real cost of a civil penalty is often measured not only in money but in reputation, disruption, and the ongoing need to prove compliance reliability.

Section F: Preventing Civil Penalties

Avoiding a civil penalty depends on having right to work systems that are consistent, well documented, and embedded across all areas of the organisation. Prevention is not only cheaper than enforcement, it also protects business continuity and sponsor licence integrity. The Home Office expects employers to be able to produce compliant evidence of right to work checks at short notice and to maintain those records for the duration of employment and beyond.

1. Right to Work Checks

Employers should ensure that right to work checks are carried out before any employment begins, regardless of whether the role is temporary, part time or unpaid. A valid check requires the employer to see the individual’s original documents or conduct an online check through the Home Office service, confirm that the document or status belongs to the person presenting it and record the date and outcome. The check must be conducted by the employer or someone acting on their behalf who understands the Home Office requirements.

Where permission is time-limited, follow-up checks are required before expiry to maintain a statutory excuse. Employers who fail to repeat checks for visa holders whose permission has lapsed risk automatic liability if the worker continues in employment after expiry. All checks must be retained securely, in digital or paper format, for at least two years after the employment ends.

2. Internal Audits and Training

Regular internal audits are the most effective way to identify weaknesses before they result in enforcement. Reviews should cover record keeping, the accuracy of check procedures and whether local teams understand how to identify acceptable documents or use the online system correctly. For larger organisations, independent external audits can provide reassurance and practical recommendations that carry weight with the Home Office if issues arise later.

Training is equally important. Those responsible for onboarding or HR administration should receive regular updates on rule changes, especially around biometric cards, digital immigration status and the move to eVisas. Many penalties arise not from deliberate non-compliance but from outdated processes or lack of awareness. Structured refresher sessions and written procedures help ensure a consistent standard across all departments and locations.

3. Record-Keeping and Oversight

A compliant right to work regime depends on reliable record-keeping. Employers should store all check records in a central, secure system that allows immediate retrieval if the Home Office requests evidence. Each record should include a clear copy of the document or online check outcome, the date the check was made, and the name of the person who conducted it. Sponsors must also meet the Appendix D record-keeping rules, which require additional retention of job descriptions, salary details and employment contracts for sponsored workers.

Oversight by senior management is key. Immigration compliance should not sit only with HR or recruitment teams. Directors and senior leaders are expected to take responsibility for ensuring appropriate systems, staff training and regular reviews. If you embed immigration compliance within broader corporate governance frameworks, you can demonstrate to the Home Office that the organisation takes its duties seriously.

Section G: Summary

The UK civil penalty regime penalises employers who employ someone without permission to work. Liability does not depend on intent. If you cannot produce compliant right to work evidence, the Home Office can issue a civil penalty. As at November 2025 the headline levels are severe, up to £45,000 per worker for a first breach and £60,000 per worker for repeat breaches, with a reduction for early payment within 21 days for a first civil penalty. A notice triggers tight timelines, including 28 days to object and a further 28 days to appeal after an objection outcome notice.

Consequences often extend beyond the fine. Sponsors face suspension, downgrading or revocation, with the attendant risk to sponsored workers and project delivery. Penalties are recorded and influence future dealings with UKVI, including renewals and compliance visits. Reputational impact can be significant where names are published or press coverage follows, and regulators may take an interest in affected sectors.

Some cases cross the line into criminal enforcement where an employer knew, or had reasonable cause to believe, a person lacked permission to work. Conviction can carry an unlimited fine and up to five years’ imprisonment, including for directors involved in the decision.

Prevention relies on consistent right to work checks, timely repeats for time-limited permission, centralised record keeping and regular audits and training. Early, evidence-led responses to any notice reduce exposure and help protect licence integrity and business continuity.

Section H: Need Assistance?

If your organisation has received a civil penalty notice or you are concerned about the risk of illegal working, our business immigration specialists can help. We advise on objections, appeals and mitigation, as well as compliance audits to prevent future breaches.

Call us to arrange a fixed-fee telephone consultation with one of our experts to discuss your situation and next steps.

Section I: FAQs

What is the fine for employing illegal workers in the UK?

As of November 2025, the maximum civil penalty is £45,000 per worker for a first breach and £60,000 per worker for repeat breaches. The fine applies even if the breach was unintentional or due to an administrative error. Employers may receive a 30 per cent reduction for early payment within 21 days, but only in relation to a first offence.

Can a civil penalty affect my sponsor licence?

A civil penalty almost always triggers a Home Office review of your sponsor licence. Depending on the severity of the breach, the licence may be suspended, downgraded, or revoked. This can affect sponsored workers’ visas and future recruitment capability.

Is employing someone illegally a criminal offence?

It can be. If the employer knew, or had reasonable cause to believe, that the person did not have the right to work, it becomes a criminal offence under section 21 of the Immigration, Asylum and Nationality Act 2006. Conviction can result in an unlimited fine and up to five years’ imprisonment for those involved.

How long do I have to object or appeal a penalty?

Employers have 28 days from the date of the civil penalty notice to file an objection. If the objection is unsuccessful, there is a further 28 days to appeal to the County Court from the decision notice. Missing these deadlines makes the penalty enforceable as a civil debt, and interest and recovery action can follow.

Can I challenge the penalty amount?

Yes, but the objection needs to include evidence showing that the penalty is incorrect or unfair. For example, if a compliant right to work check was carried out or if the worker was not actually employed, the Home Office may reduce or cancel the penalty. Submissions without supporting evidence are usually rejected.

Are civil penalties tax-deductible?

HMRC treats them as sanctions for unlawful conduct, meaning they cannot be claimed as a business expense. Employers must absorb the cost directly, along with any associated legal or operational losses.

Can penalty details be made public?

The Home Office can publish the names of employers fined for illegal working, and local or national media often report such cases. This can lead to lasting reputational damage and may affect tenders, contracts and regulatory relationships.

Does outsourcing recruitment reduce my liability?

Employers remain legally responsible for checking the right to work of every individual they employ, even if an agency or contractor carried out the recruitment. Delegating checks does not transfer legal responsibility under the 2006 Act.

Section J: Glossary

Section K: Additional Resources and Links