HR Newsletter No: 172 - Right to Work Checks (RTW) – Are You Compliant?

Well the Home Office reckons that many organisations are not. And with fines of £60,000 per person and audits on the rise, it is costing employers considerably more than Employment Tribunal claims.

So, while we are not immigration specialists, we do know the checks that employers should be carrying out to protect themselves by having a statutory excuse. And, how often we are surprised to see these have not been done. 

A "statutory excuse" in the context of UK immigration law is a legal defence for employers against civil penalties for employing an illegal worker. It is a protection granted if the employer has followed the correct procedures for verifying an employee's right to work in the UK. Essentially, it means the employer is not liable for fines if they have done everything they legally should have to check an employee's immigration status. 

The most common mistake that employers make is to undertake the RTW checks late.  The law requires that RTW checks are done before the employee starts, not even on the first day, or during the first week.  The simplest way of ensuring that you do not breach the law is to ask all job applicants to bring either suitable right to work documents, which may include a share code, that can be checked prior to a job offer being made.  So, when inviting people to attend job interviews, you will need to make it clear what documents they need to bring with them on the day.  

If the checks are not done before the employee starts work, then the employer has lost their ‘statutory excuse’ and are immediately liable to a civil penalty.  If you get a Home Office audit, the only way you can mitigate the size of the fine is by demonstrating that you did do all of the appropriate checks, albeit later than required. Even then the £60,000 fine per person may only be reduced to £40,000.  

If you pay the fine immediately, then the fine could go down further. But if you need to make staged payments, we are told the lowest fine you can hope for is a £40,000 penalty for every person that has not been checked properly according to the audit.   

The Home Office recently commissioned research on the matter. This has highlighted significant gaps in employer knowledge about Right to Work (RTW) checks. SMEs, in particular, face a real risk of costly mistakes.

Key Findings:

• 80% of businesses answered at least one RTW compliance question incorrectly.

• 51% incorrectly said a driving licence or bank statement was acceptable RTW documentation.

• 64% mistakenly thought rechecking was required every five years.

• 81% of employers using agency workers incorrectly believed recruitment agencies were responsible for checks.

• Only 24% of employers using digital ID service providers knew documents must be retained for employment duration plus two years.

• £20 million issued in civil penalties for RTW non-compliance in a single quarter.

• Referrals for compliance checks increased tenfold between 2022 and 2024.

Just to put this in perspective, and with the caveat that the figures are difficult to calculate exactly, but we reckon that Employment Tribunals made just over £20m of awards for the whole of 2023/24. About the same as one quarter of what the Home Office issued in civil penalties. 

Ask yourself which threat do you take more seriously, the risk of a Tribunal or a RTW compliance check?

Five Key Action Points:

1.    Train Your Team

• Ensure all hiring Managers and relevant staff understand their responsibilities for conducting RTW checks before people start work, not recruitment agencies or subcontractors.  

• Make sure that manual checks are properly validated, writing down the name of the person who checked the photo against the passport, their job title and the date this was done.   

2.     Use Correct Documentation

• Only accept acceptable forms of documentation, such as UK or Irish passports or relevant visas. Driving licences, bank statements or utility bills are NOT valid proof of the right to work.

3.     Conduct Regular Reviews

• Recheck documents at the point a worker’s permission expires, NOT every five years.

4.     Maintain Proper Records

• Keep RTW check documentation securely for the duration of employment, plus an additional two years.

5.     Stay Informed

• Regularly visit the Home Office website or consult professional advisers for updates to RTW check requirements, especially as digital methods evolve and new rules are introduced.

Compliance mistakes can be very costly and easily avoidable with the right knowledge and procedures. SMEs must act proactively to protect their organisations from significant penalties and legal action.

Clients are welcome to raise any concerns with our Consultant team, who would be pleased to advise you on any element of the issues arising from this newsletter.