The Government announced on 7 August that the penalties which can be levied against employers and landlords who, respectively, employ or rent property to overseas nationals who are in the UK illegally, are to be substantially increased from 2024.
Employers
The current penalty where an employer is found to have employed a worker illegally is £15,000 for the first offence, and £20,000 for further offences. The new penalties will be £45,000 and £60,000 respectively, a three-fold increase.
The pecuniary punishment should be considered alongside the full range of implications an employer liable for illegal working can be subject to: reputational damage from the public record of the offence, harm to business continuity from the sudden loss of staff, the time and cost of dealing with an illegal working situation, and risk of Sponsor Licence compliance audit and/or suspension/revocation. In serious incidents of illegal working, criminal charges may also be brought. This is, of course, if the business can continue operating at all given the financial catastrophe that such fines can cause, especially if multiplied.
Landlords
For landlords, the current penalties for renting to those without a visa is between £80 – £500 for lodgers, and £1,000 – £3,000 for occupiers. These penalties will be dramatically increasing to £5,000 – £10,000 for lodgers and £10,000 – £20,000 for occupiers. Additional punishments for landlords may also include criminal charges in serious circumstances.
The risk to landlords is particularly high given there is a positive obligation to report when a lodger/occupier no longer has the right to rent in the UK.
Right to Work and Rent Checks
Both employers and landlords can protect themselves by carrying out a compliant right to work or rent check. This involves checking the individual’s passport or visa, either in original format or by using the Home Office’s online checking service and obtaining a share code from the visa holder. An appropriate record must be kept of the check carried out, and close attention should be paid to ensuring the correct process is followed. A compliant check gives a Statutory Excuse which is a defence against liability where illegal working or renting is identified. Follow-up checks are also required to maintain that Statutory Excuse where an individual’s visa expires during the period of employment or residence.
What constitutes a compliant right to work or rent check has changed significantly over the last few years and many employers and landlords may not be up to date on the correct processes and acceptable documents, leaving them at risk. It is strongly recommended to review and update processes to ensure compliance.
This is an extract of an article previously published here.
You can find more information on our Immigration offering here.
