Derek Kelly: What HR professionals need to know about the new Immigration Bill

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All UK-based businesses have a duty to ensure that their employees are legally entitled to work in the country. Since February 2008, this obligation has been underpinned by a civil penalty scheme. Under the current system, an employer who flouts the rules by hiring illegal workers can be hit with a civil fine of up to £10,000 per worker. Employers are also required to carry out annual employment verification checks on all workers who are non-EEA nationals and subject to immigration control.

Recent figures, unearthed following a Freedom of Information (FoI) request, show that 1,270 Notification of Liability (NOL) notices for these civil penalties were issued to employers last year. The total value of these fines was £10.8m which, though down 10% on the £12m figure for 2011, is still a considerable sum by anyone’s standards. That’s assuming, of course, that these fines were actually paid by the employers in question.

These figures demonstrate that – more than five years after fines for hiring illegal workers were introduced – a minority of employers are either unaware of their responsibilities or choosing to ignore them. As skilled HR professionals, readers of HR Review won’t, of course, fall into this category. However, a relative lack of publicity regarding proposed reforms to the current enforcement scheme – changes that will have implications for any HR department that employs migrant workers – means the topic warrants further discussion.

Illegal worker fines: get set for reform

Back in July of this year, the coalition government launched a six-week public consultation on proposals designed to “strengthen and simplify” the current civil penalty scheme to prevent illegal migrant working.

As the consultation document itself states: We propose to….get tougher on employers who continue to exploit illegal migrant workers, and increase the sanction to reflect the harm they cause. In parallel, and mindful of burdens on legitimate business, we are proposing a number of measures to significantly reduce the administrative costs of complying with the requirements to make checks.

A week later, immigration minister Mark Harper added: “Legitimate businesses will benefit in two ways: from tougher sanctions against rogue employers and from our intention to make it easier for compliant businesses to fulfil their duties…as we extend a warm welcome to the many migrants who make such an important contribution to life in the UK, we want to see tough action against those who have no right to be here, and also against the unscrupulous employers who exploit them.”

Punitive or proportionate? The jury is out

Arguably the most striking and eye-catching element of the reforms, due to be included in Immigration Bill when it is published today, is the proposal to double the maximum fine per illegal worker from £10,000 to £20,000. Policymakers believe that a figure of £20,000 would more accurately reflect the unfair financial advantage – in terms of savings on wages, tax and National Insurance contributions – gained by “rogue employers” who hire illegal workers.

As the Guardian reported this morning (10th October), there are also plans to make it easier for the Home Office to recover unpaid fines on companies who employ illegal migrants. Personally, I’m of the opinion that employers who continually exploit workers and blatantly ignore the rules should have their personal assets seized and be hit with prison sentences – but that’s another story.

More significant, and indeed controversial, than the proposal to double fines are the plans to hit first-time offenders with fines rather than warning letters. Critics argue that this could result in unfair punishments for start-ups and established, legitimate employers who have never hired migrant workers before, and are therefore simply unfamiliar with the assorted legal hoops that must be jumped through when doing so.

There are also concerns that removing the ‘yellow card’ step of warning letters for first-time offenders could deter such employers from co-operating with the government. The fear is that an honest, legitimate employer who goes through the process of hiring a migrant worker for the first time, only to realise afterwards that they have made a mistake, will keep quiet rather than alerting the authorities in order to avoid a fine. Ultimately, it is claimed, the reforms could inadvertently make detection of illegal working more difficult.

For its part the government believes that, more than five years after civil penalties were introduced, employers should be aware of their legal obligations by now.

Right-to-work checks: the first line of defence for employers and HR pros

Regardless of any reforms employers should, of course, carry out right-to-work checks on all migrant workers prior to hiring them. Crucially, carrying out such a check creates a defence or ‘statutory excuse’ for the employer in the eyes of the law. The right-to-work check process involves verifying the individual’s passport and other Home Office-approved ID in order to ascertain their true identity and employment status. Any discrepancies or inconsistencies in different pieces of ID must be probed and explored, and copies must be made in a format that cannot be tampered with.

The proposed Immigration Bill reforms include a plan to remove the requirement to carry out annual right-to-work checks on employees with time-limited permission to be in the UK. Instead, employers would simply be required to conduct a follow-up check to coincide with the expected expiry of the individual’s permission to be in the UK.

However, a proposal to reduce the range of documents needed to evidence a migrant’s eligibility to work in the UK, by making greater use of hi-tech biometric residence permits (BRPs), is thought to be some way off implementation due to low take-up of such permits amongst non-EEA nationals.

Whatever you think of the proposed reforms, it remains the case that the best way for employers and HR departments to protect their position is to routinely carry out rigorous, comprehensive right-to-work checks on all prospective employees. It is also worth bearing in mind that third parties, such as outsourced employment providers (also known as umbrella companies), will carry out right-to-work checks on your behalf as part of their service. However, be sure to exercise caution when selecting such a provider as levels of compliance vary widely within the industry.

Derek Kelly is managing director at Parasol, the leading provider of outsourced employment solutions to the UK’s contingent workforce and the staffing businesses and clients who work with them.

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