Civil Penalties for Illegal Working

A civil penalty is a fine the Home Office can impose on an employer found to be employing someone who does not have the right to do the work in question. Penalties are calculated per illegal worker, so the total can quickly become very large, and a penalty can also have serious consequences for a sponsor licence.

Employers can protect themselves by carrying out correct right to work checks, which give a "statutory excuse". Where a penalty has been issued, there are strict time limits to object, appeal or arrange payment.

How much the penalty can be

Since 13 February 2024, the maximum civil penalty is £45,000 per illegal worker for a first breach and £60,000 per illegal worker for a repeat breach within 3 years. These amounts were increased from the previous levels. The amount actually imposed can be reduced depending on the circumstances, for example where the employer reported a suspicion to the Home Office or co-operated actively; the Home Office's code of practice sets out reductions of £5,000 per worker for such factors.

The statutory excuse

An employer will not be liable for a civil penalty if it can show it carried out the prescribed right to work checks correctly, at the right time, and kept the required records. This is known as a statutory excuse. See our page on right to work checks.

Common reasons penalties are issued

• No right to work check was carried out before employment started.
• The check was done incorrectly, for example by accepting a document that is not on the prescribed lists or an expired biometric residence permit.
• Copies were not retained, or were not dated.
• A required follow-up check was not carried out for someone with time-limited permission.

Responding to a penalty notice

Objection

An employer can object in writing within 28 days of the due date specified in the notice. An objection can challenge whether the employer is liable at all, for example because it has a statutory excuse, or argue that the amount should be reduced.

Appeal

An appeal can only be made after an objection. It goes to the County Court (in England, Wales and Northern Ireland) or the Sheriff Court (in Scotland), and must be brought within 28 days of the date of the Objection Outcome Notice.

Paying the penalty

• Faster payment: for a first penalty only, the amount is reduced by 30% if paid in full within 21 days. This option cannot be combined with instalments.
• Instalments: employers can ask to pay by instalments, usually over up to 24 months.

Criminal offences

Knowingly employing an illegal worker is a criminal offence. On conviction on indictment, it can lead to up to 5 years' imprisonment and/or an unlimited fine.

Impact on sponsor licences

For sponsors, a civil penalty is likely to lead to revocation of the licence. A cooling-off period of 12 months generally applies after the penalty has been paid in full, rising to up to 5 years where there have been two or more penalties. See sponsor licence suspension and revocation.

Changes from 1 October 2026

From 1 October 2026, the Border Security, Asylum and Immigration Act 2025 extends illegal working rules beyond traditional employment. Businesses will be able to face civil penalties in relation to people engaged under worker contracts, individual sub-contractors and people matched with work through online platforms, including through contracting chains and substitution arrangements. These new penalties apply only where the work started on or after 1 October 2026. A new code of practice and employer's guide are due to take effect on the same date. The maximum penalty amounts are unchanged.

Businesses that use contractors, sub-contractors or platform workers should review their checking arrangements now, including who in the contracting chain carries out checks and how records are kept.

Preventing penalties

The best protection is a clear, consistent right to work process: checking every new starter before work begins, using the correct type of check, keeping dated records, and diarising follow-up checks for anyone with time-limited permission.

How Stonebridge can help

• Advice when officers have visited or an initial notice has been received.
• Assessing whether a statutory excuse or mitigating factors apply.
• Preparing written objections with supporting evidence.
• Advice on appeals, payment options and the effect on a sponsor licence.
• Reviewing and improving right to work processes, including for contractors from 1 October 2026.

The time limits for responding are short. If you have received a notice, book a consultation as soon as possible.