The real cost of hiring illegal staff

New rules to be introduced on Friday (29 February) will see employers who knowingly hire illegal migrant workers being hit with a £10,000 fine or a prison sentence. The new legislation is part of a crackdown on rogue employers that deliberately exploit migrant workers.

In this new climate of tougher security, most employers acknowledge they should bear the cost for employing illegal migrant workers, with HR departments recognising that the bulk of responsibility will fall on their shoulders.

Employee checks

To escape liability for a civil penalty, employers must check specific documents when hiring new staff and make subsequent checks at 12-month intervals for workers who have limited leave to enter or remain in the UK. The severity of the fine depends on the nature of checks the employer has undertaken.

Catherine Richmond, an associate at law firm Nabarro, said the new regulations meant extra work for HR. “Until now, it has been enough to tick the box once, at the recruitment stage, to make sure that a prospective employee had the right to work in the UK,” she said.

“Now, the boxes will have to be ticked at yearly intervals for as long as staff who have limited leave to remain in the UK continue to be employed by your organisation.”

HR managers who don’t keep their records and copy documents in order may lose their defence against civil penalties and fines, she warned.

Red tape

Andy Freshwater, resourcing executive at food services firm Compass Group, said the increased red tape would have a big impact on his organisation.

“Instead of checking just one candidate at offer stage, our business is now checking all candidates who are applying – whether successful or not. This has the knock-on effect of increasing the number of further checks requiring Home Office clarification for any suspicious documentation,” he said.

In addition to the entry requirement checks, extra administration will be neede to check those candidates who have limited entry and work status as well, he said.

Freshwater pointed to the importance of educating line managers in thoroughly checking a candidate’s right-to-work status, to hold copies on file of applicable documentation, and to check out any suspicious documents with the Home Office. Historically, this was checked at offer stage.

Locate documents

Because of the new laws, Compass has implemented a new process to instruct managers to make every possible effort to block illegal immigrants from entering its workforce.

“There is a concern that the time to hire will be extended if candidates are unable to locate the appropriate documentation – for example, a birth certificate or passport,” he said. “We may lose potentially great candidates because we do not have the luxury of waiting for this evidence.”

Jonathan Hearn, legal director at law firm DLA Piper, urged employers to make sure they did not inadvertently breach race discrimination law during the recruitment process. “It will be essential to apply whatever policy the employer puts in place to all applicants, and not make stereotypical assumptions about candidates,” he said.

There was likely to be more room for error and inconsistent treatment – and consequently race discrimination claims – when an organisation is reviewing workers with limited leave to be in the UK, Hearn warned. “There is concern that it might be done in an ad hoc way, open to subjective decision making and inadvertent assumption,” he said.

Under scrutiny

Retail, like hospitality and food services, is also a sector that may come under more scrutiny because of the new laws. Despite this, Nathan Clements, director of organisation development, HR, at DIY giant B&Q, said it was important all employees – even those with a limited UK working status – had the opportunity for career development.

“The management of illegal working in the UK is vitally important, but we also need to ensure that we address the other side of this equation, namely the continued provision for all workers with real opportunities to develop their skills and fulfilling careers,” he said.

However, Dave Conder, HR director at professional services firm KPMG, said he was not concerned by the new laws. “We do not expect a significant impact on our business as a result of these changes,” he said.

“We thoroughly check the background of our employees to ensure they have their continuing right to work in the UK and we ensure that appropriate checks are in place from our recruitment agency suppliers.”

Illegal working in the UK

  • The statutory maximum penalty for employing an illegal worker is £5,000, rising to £10,000 on 29 February.
  • The number of foreign workers entering the UK has increased by 75% in the past six years, from 864,000 in 2001 to two million people.
  • In 2006, the Border and Immigration Agency carried out more than 5,200 illegal working operations and removed more than 22,000 people from the UK.

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