Errors In Shift Allocation Could Cost You Your Business and Your Freedom

Naomi Hanrahan-Soar is a Senior Associate in the immigration team at Lewis Silkin LLP

The simple error that could put you in gaol. Don’t risk a prison sentence for simple compliance issues:-

Most employers understand they have a legal obligation to ensure employees have the right to work for them. However, very few appreciate how precise those laws are and how huge the cost of non-compliance can be. In ten years of advising on UK immigration law, I have not once audited a new client who was totally compliant. If your employees work variable hours you are even more at risk.

What kind of penalties are we talking about? At worst, your business could be fined an unlimited amount and the person deemed responsible could be imprisoned for up to five years. For that penalty to apply, you should reasonably have known you were employing someone to work illegally. Not that you actually knew, but that you should have known. That’s a lot easier than you might think.

The starting point for illegal working penalties is £20,000 per worker who is found to be working illegally. I have come across numerous such penalties for hotels and catering companies where they have unknowingly employed someone on a fraudulent passport, someone who worked beyond their visa’s limitations or beyond their visa’s expiry date. Fraudulent passports are almost impossible to identify, so the only way to protect yourself from such fines is to ensure that you have completed a 100% compliant right to work check and you have robust systems in place to ensure ongoing right to work monitoring.

In typical legal fashion, the requirements for a compliant right to work check are pedantic and not necessarily logical. The only way to ensure you are getting these absolutely correct is to be up to date with the legislation, tick every box (no matter how ridiculous) and follow up with the checks and systems required after the initial right to work check. It’s not rocket science but it is pernickety so you can’t rely on logic or the spirit of the law.

At one mock audit and training session I provided to a client not long ago, it was clear they were incredibly diligent about compliance. They had incurred a penalty after a HMRC tip-off that a student had worked more hours than allowed. Students who hold a Tier 4 General visa are restricted to working a maximum of 20 hours per week during term time. Under the new regulation, allowing the student to work more than this, could lead to prison as the employer “should reasonably have known” the employee worked illegally.

The audit then revealed that the employer had made a perfectly logical conclusion that 20 hours per week was the same as 40 hours per fortnight. Not so sadly.

The Home Office have recently dictated that the 20 hours per week is measured from Mondays. So not only do you need to take a 100% compliant right to work check including evidence from the student’s university of their term dates, you also need to fit into the Home Office’s working week, even if your own shift allocation system is run on a fortnightly basis, for example.

The Government is trying to create a “hostile environment” for illegal migrants by making it hard for them to work in the UK. It requires fewer man hours and less cost for the Government if they can effectively outsource the regulation of these policies to employers. The Government then regulates employers through audits and cross-referencing information with other agencies. Hospitality sector employers dominate the public register of illegal working penalty recipients.

The Byron Burgers scandal was surprising in part because of the public reaction to an employer acting as required by law, and partly because they were given prior warning of the audit. Not all employers are so lucky. Smaller hospitality companies in particular are often subject to surprise audits by scary enforcement officers, keen to nab illegal working racketeers. In reality, most offenders are accidental rather than racketeers.

With Brexit an ominous cloud on the horizon, compliance will only become more important and more challenging. That’s not to mention the requirement to establish which European employees will still have the right to work in the UK or not. When restrictions on free movement to work are introduced, it will be necessary categorise European nationals. Documentation that was not previously required, will almost certainly become so. Many employers, are supporting the necessary applications to document European employees now, in preparation.

If you wait until you receive a penalty it may be too late for full damage control. Don’t risk your business when some simple proactive action now, could prevent crippling fines in the future.