Civil Penalties for Employing Illegal Workers: Why Employers Must Act Now

In February 2024, the Home Office introduced a significant increase in civil penalties for employers found to be hiring or retaining individuals without the legal right to work in the UK. First-time breaches now carry fines of £45,000 per illegal worker, while repeat offences can lead to penalties of up to £60,000 per worker. This represents a threefold increase compared to previous levels, demonstrating the government's commitment to toughening its stance on illegal employment.

What Are Civil Penalties and When Are They Applied?

Civil penalties are financial sanctions imposed on employers who:

• Fail to carry out proper right to work checks, or
• Knowingly employ or have reasonable cause to believe they are employing individuals without lawful status to work in the UK.

These penalties are not criminal convictions, but the consequences can be severe. In the latest data released by the Home Office for the first quarter of 2025 (January to March), enforcement action resulted in:

• 748 civil penalty notices issued and
• A total of £41.6 million in fines.

This represented a stark increase from data for the fourth quarter of 2024 (October to December), where the number of civil penalty notices issued was 489, and the total value of fines was £29.2 million.

Increased Enforcement and Sector-Wide Action

The Labour Government has significantly stepped-up enforcement since they were elected in July last year, as part of what the Home Office have described as a ‘UK-wide blitz on illegal working’. Since July 2024:

• Over 9,000 enforcement visits have been carried out;
• 6,410 arrests have taken place; and,
• 1,921 civil penalties have been issued, marking an increase of over 40 percent compared to the previous year.

In January of this year alone, immigration enforcement teams made visits to 828 premises, a 48% rise compared to January 2024. Recent operations have included visits to restaurants, construction sites, car washes, and care providers. In Scotland, for instance, five restaurants were recently visited, resulting in arrests and the issuance of penalty referral notices to all five businesses involved.

Why This Matters to Employers

The rise in civil penalties is not only a financial risk. Businesses found in breach can face:

• Revocation of sponsor licences;
• Disqualification of directors;
• Severe reputational damage; and,
• In cases involving knowing employment, criminal prosecution carrying sentences of up to five years.

Taking Action: How to Stay Compliant

1. Carry Out Right to Work Checks Consistently
   Follow Home Office guidance rigorously. This can be done manually or through approved digital identity verification services. All employees must be treated equally under these procedures.
2. Keep Clear Records
   Employers should retain dated copies of all checks. This provides a statutory excuse if a breach is later alleged.
3. Audit Your Workforce
   Conduct regular internal audits of employee files, especially for subcontractors, temporary workers, and gig economy staff. Future legislative changes are likely to widen the scope of liability.
4. Report Concerns Proactively
   If you suspect an individual is working illegally, early reporting and cooperation with the Home Office may reduce the penalty by up to £5,000 per worker.
5. Understand Your Rights if Fined
   Employers have 28 days to respond to a Civil Penalty Notice. They can pay, object, or lodge an appeal following the Home Office’s objection process.

How We Can Assist

The message from the Home Office is clear: enforcement is intensifying, and businesses are under growing scrutiny. Employers should not wait until they receive a penalty notice to act. By proactively auditing right to work procedures and training staff, businesses can ensure compliance and reduce the risk of serious legal and financial consequences. 

Taking steps now to protect your business is not only a legal obligation but also a sound operational strategy.

At Irwin Mitchell, our immigration specialists provide clear, practical advice tailored to your business needs. We support employers with right to work audits, compliance reviews and training to help safeguard against breaches and maintain workforce integrity.