Legal: right-to-work checks

Legally engaged?

11 December 2015

Stuart McWilliams sets out the importance of effective right-to-work checks on new employees

At the start of August, the UK government announced a clamp down on businesses employing people illegally. The construction industry was specifically targeted, and while much of the rhetoric refers to clamping down on 'rogue employers', all businesses in the sector could now face strict scrutiny.

To ensure compliance, all businesses are legally required to verify that all of their employees have the right to work in the UK. However, this process is not always straightforward and what may seem to be a small error can have huge consequences. Any business found to have failed to comply faces fines of up to £15,000 for each worker (for its first offence) and £20,000 for each worker thereafter. Businesses can also be 'named and shamed' by the Home Office, leading to negative publicity, with additional consequences for employers holding Home Office sponsor licences.

Right-to-work checks are necessary for all new employees starting on or after 29 February 2008. Individuals who were already employed, and have been continuously employed since that date are not subject to verification and a business cannot be fined if they are found to be working illegally.

Every business should have a policy for checking employees have the right to work, and should ensure that this is applied and monitored by senior staff who have received appropriate training

It is essential that checks are carried out before an individual begins work, and for this reason all job offers should be made subject to the "applicant demonstrating they hold the right to work in the UK". Particular care needs to be taken when potential employees are given a trial period, because the government will consider this to be employment and therefore subject to a right-to-work check. In one recent case, an employer offered an individual a 2-day trial period and at the end did not offer any further employment. Several months later the business was inspected by the Home Office and was fined £15,000 because the individual did not have the right to work at the time.

The requirement to check whether someone holds the right to work in the UK applies to all new employees, regardless of nationality. To avoid potential discrimination claims, it is important that businesses do not make assumptions based on applicant's colour, nationality, ethnic or national origins, accent or length of time they have lived in the UK. Every business should have a policy for checking employees have the right to work, and should ensure that this is applied and monitored by senior staff who have received appropriate training.

Checking stages

Obtaining evidence: It is important that an individual provides an original document to demonstrate their right to work. In many cases this is likely to be their passport, but other documents can be accepted in limited circumstances, i.e. a biometric residence card issued by the Home Office if it confirms someone holds indefinite leave to remain. The fact that someone has a National Insurance number or a UK birth certificate does not mean that they automatically have the right to work, and further evidence may be required.

Checking documents: This might seem obvious but an employer needs to examine the documents and ensure they look genuine. Photographs, names and dates of birth should match the information provided by the prospective employee, and there should be no obvious signs of tampering. Employers are not expected to become experts in identifying forged documents, and if a document looks genuine an employer will be given the benefit of the doubt. They are, nevertheless, expected to notice and question any obvious inconsistencies or flaws.

Keep a copy: Not complying with this stage can have significant consequences. If the employer does not retain a clear copy of the document, the check has not been carried out successfully. Best practice is for the person carrying out the check to sign and date the copy before storing it securely. The importance of this is demonstrated by the case of the former Immigration Minister Mark Harper, who resigned after he became aware that one of his employees did not have the right to work, and he had lost his copy of the evidence he had seen when carrying out the initial verification.

When carrying out a check it is important to record any visa restrictions, and to ensure that these are complied with. As an example, holders of some student visas cannot work for more than 20 hours per week, with any breaches carrying enforcement action. It is also vital that the initial check identifies if and when a follow-up is required and that this is diarised. If this action is not taken, employers expose themselves to the risk of employing someone after visa expiry. Table 1 identifies whether a follow up check is required and the documents needed to demonstrate someone's right to work.

Right- to- work

Potential problems

Even if an employer adopts a robust right to work procedure, there are a number of potential issues of which they should be aware. A common query encountered is the issue of subcontractors. Under existing legislation a business is not liable if it contracts with another company, and that subcontractor employs someone illegally.

However, in assessing who is liable for any breaches of right to work procedures, the Home Office can apply a similar test to HMRC and argue that a subcontractor's employee is actually employed by the main business. To minimise this risk, businesses may wish to consider adding terms relating to verifying the right to work to any contracts, and making provisions for subcontractors to indemnify them for losses.

Another common issue is where an employee, or potential employee, is unable to produce a visa because of an application pending with the Home Office. Under UK immigration laws, anyone who submits an application for further leave before the expiry of their visa will retain the same rights and entitlements while their application is processed. This can often take several months to resolve or longer if an appeal is necessary.

During this period, businesses can protect themselves by carrying out a verification check with the Home Office's Employers Checking Service (ECS). If the ECS verifies someone has the right to employment then the business can employ them for 6 months from the date of that letter, but must carry out a repeat check if alternative evidence has not been provided by the end of that period.

A final issue concerns non EEA nationals who are married to an EEA national. In these circumstances, the non EEA national may be automatically entitled to work, but may not be able to produce evidence of this. It may be that they are reluctant to go to the expense of obtaining confirmation of right to work from the Home Office, but the business should be aware that unless it is provided with a copy of a residence card confirming the individual's right to work, then they will have no statutory defence to any Home Office enforcement action if the person is found to be working illegally.

What should businesses do?

In light of the approach set out by the Home Office, businesses should be reviewing their right to work procedures and records to minimise the risk of facing enforcement action. By instructing audits, either internally or through an independent adviser, businesses can identify any issues and rectify them.

If an audit uncovers a potential problem, a business can mitigate the damage by reporting this to the Home Office, which can see any fine reduced by £5,000. A further £5,000 reduction is available where the business has robust procedures in place for verifying the right to work, which further emphasises the importance of implementing such a policy.

Verifying that someone has the right to work is not always straightforward, and while the Home Office may be targeting 'rogue' employers, many employers with good intentions and strong procedures have fallen foul of legislation in recent years. The Home Office announcement should serve as a warning to all within the industry that this is an issue that must be taken seriously.

Stuart McWilliams is an Associate at Morton Williams LLP

Further information

Related competencies include: Managing people

This feature is taken from the RICS Construction journal (November/December 2015)