Home office powers to close businesses

With effect from 1 December 2016, the Home Office gained powers to close a business if it considers that the employer operating at a particular premise is employing a person who does not have permission to work in the UK. The closure notice can close the business for up to 48 hours or longer.

For certain businesses reliant on trading at a specific location, the financial impact of a closure could be significant and damaging.

While the new legislation will impact on all sectors, those at highest risk are those:

  • employing short term staff eg those on short fixed term contracts or zero hours;
  • using the services of contractors/sub-contractors; and
  • where right to work checks/administration is decentralised.

Sectors particularly at risk include construction, healthcare, manufacturing, hospitality and retail

This legislation does not create a new obligation for employers however the sanction of a closure is a warning signal to make sure that right to work checks and management of sponsorship licences procedures are robust.

What is the process?

Schedule six of the Immigration Act 2016 created powers for the Home Office to not only close a business but to force the production of either right to work checks or previous right to work check documentation.

The illegal working closure notice is issued by the Home Office to close a business premise where the employer is found to be employing a person who has no permission to work in the UK. The initial notice can close the business for up to 48 hours.

Once an illegal working closure notice is issued, an application to the court for an illegal working compliance order to extend the provisions of the order for up to 12 months can be made. This can again be extended by a further 12 months if allowed by the court.

The order can restrict or prohibit access to the premises, require the employer to perform right to work checks and produce right to work check documents and any other provision deemed appropriate.

A person who enters the premises or contravenes the order will be committing an offence punishable with up to 51 weeks imprisonment and/or a fine.

If an employer with a Home Office tier one, tier four or tier five sponsor license fails to produce compliant right to work documentation, this has more serious implications representing a breach in sponsor duties.

In our experience employers should watch out for:

  • employees without passports;
  • employees whose paperwork doesn’t quite add up;
  • employees without bank accounts;
  • biometric cards expiring; and
  • visas and work permits with certain restrictions, ie students can often only work for 16 hours per week.

What actions can employers take?

Review your internal arrangements and processes and ask these questions:  

  • Are the right people undertaking this activity at the right time?
  • Are your processes robust?  
  • Would your business withstand a Home Office inspection tomorrow?  
  • Are the hard copies of records easy to locate?  
  • Do you keep a centralised electronic record too that is easy to identify where attention may be needed?
  • Are you best placed to review yourselves?

RSM can undertake an immigration review for you. This could prove a really prudent move in light of the governments continued focus on this area especially with the disciplinary action the government can take against those employers who are not totally compliant.

For more information please get in contact with Nicki Barnes.