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UK employers face penalties for illegal working

United Kingdom
Written by
Lewis Silkin, widely recognised as the UK’s leading specialist employment law practice.
The UK Home Office is currently cracking down on illegal working. Employers of illegal workers may be liable to civil penalties of up to GBP 20,000 per illegal worker and may also suffer other adverse consequences for their businesses. Employers need to understand how to deal most effectively with a civil penalty notice if one is received.

As part of a nationwide operation in June 2023, the UK Home Office conducted a record number of visits to businesses targeting illegal working. They arrested over 100 workers and are currently in the process of determining further actions, including whether to issue civil penalty notices to employers. Employers have a number of options if they receive a civil penalty notice from the Home Office.

Option 1: Object to the notice

If an employer wants to object, they must do so in writing using the proper form and submit evidence within 28 days of the notice being issued. There are three grounds to object and the employer can rely upon one or more in combination:

  • The employer is not liable to pay the penalty: This may be the case for example if there is the recipient of the notice is not the employer. Note that determining employment status can be difficult especially where the lines between contractors and workers/employees can seem blurred.
  • The employer has a statutory excuse: This will be the case where a compliant right to work check was carried out, even if the employer was misled by an employee who did not have the right to work. If the employee does have the right to work, liability for a civil penalty is not established.
  • The level of the penalty is too high: This may be argued by the employer if they believe the amount has been miscalculated using the wrong scale or they meet specified mitigation criteria, and this has not been taken into account.


The Home Office will consider objections within 28 days, and send the employer one of the following:

  • A warning notice: This tells the employer that they are not liable for the civil penalty.
  • A new civil penalty notice where the penalty is increased: This can happen where the Home Office does not accept the submissions made in the employer’s objection and there are grounds to believe that a previously applied discount no longer applies. The employer may consider appealing the decision.
  • An objection outcome notice: This may cancel, reduce, or maintain the civil penalty that was issued.

Option 2: Pay quickly for a 30% discount

If an employer does not want to challenge the notice, they can opt to make payment in full within 21 days of the date of the notice. If an employer wants to object first, they are still eligible for the 30% discount provided they make the payment in full by the new date stated in any fresh notice. The 30% reduction is only available to employers who have not been found to be employing illegal workers within the previous three years.

Option 3: Ask to pay by instalments

If an employer considers they cannot afford to immediately pay the penalty in full, they can request to pay by instalments over a period of time, usually 24 months, subject to agreement. Debt recovery enforcement action is triggered if the employer fails to make a payment. An employer is not eligible for the 30% discount if they pay by instalments.

Further consequences

The consequences of an employer being found liable for an illegal working civil penalty can be far-reaching. If the employer has a sponsor licence for employing overseas workers, they are at an increased risk of having their licence revoked. If this happens, all individuals sponsored under the licence will have their immigration permission shortened, normally to 60 days from the date they are notified. They must either submit a fresh immigration application or leave the UK before the shortened permission expires.

The Home Office publishes reports on the civil penalties it issues. This means that liability can lead to reputational damage, including, in some cases, negative press coverage.

An employer can also be at risk of potential criminal prosecution if they know, or have reasonable cause to believe that they are employing an illegal worker.

With Home Office activity in this area on the rise, employers should be aware of what to do on receipt of a civil penalty notice.

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Supinder Singh Sian
Partner - United Kingdom
Lewis Silkin