Red flags to look for when spotting financial abuse
COVID-19 has had a severely damaging affect on all organisations and no less so those in the charitable sector. Be that on a dramatic hit to donation levels, resourcing issues through furloughing or redundancies and difficulties in delivering programmes and training. In a battle to survive and deliver on core services, it is easier than ever to forget crucial internal risk and compliance processes.
Most charities will have a prevention of illegal working policy in place, but in lockdown in the midst of a pandemic, it is still important to ensure the usual strict measures are followed. With fines of up to £20,000 per illegal worker, fines can really add up. Risks are heightened where national charities may be more decentralised than in other organisations and have staff spread over the country with a transient workforce. COVID-19 coupled with the most significant change ever to UK immigration law in the form of Brexit and the end of free movement on 31 December 2020 adds to the importance of focussing on immigration risks. EU citizens who arrive in the UK for the first time from 1 January 2021 require permission to work and so charities need to be more vigilant than ever.
If you are suspected of employing an illegal worker, the first notification you receive is likely to be an Information Request relating to an Illegal Working Civil Penalty, from Immigration Enforcement. This request must not be ignored. There is usually a very strict deadline for a response highlighted clearly on the letter.
If you receive an Information Request, Immigration Enforcement is already concerned that the named person is, or has been, working for you without permission. The circumstances may have come to Enforcement’s attention by a tip off from the public, or through information sharing with HMRC for example, which allows Enforcement to see that your organisation is making salary payments to a person who does not have work permission.
If you are found to have been knowingly employing a worker who did not have permission, you can receive a custodial sentence and unlimited fine. If you are found to have been employing a worker who did not have permission, and you are unable to show you completed the right to work check/s correctly, your organisation can receive a £20,000 fine per worker. In both cases any sponsor licence held by the organisation will also be at risk.
However, if you are able to demonstrate that you carried out the right to work check/s correctly, you will have established a statutory excuse (defence) against the proposed illegal working fine. This is the moment that your right to work checks will prove their worth as the business will not receive a fine and will face no further action. As long as your right to work checks were completed correctly, you will not receive a fine, even if the person was in fact working without permission (e.g. they presented false documents to you or their permission has ended and you were not aware.
If the person in question is a current employee, we do recommend speaking to them to understand whether they believe they have a current right to work. The correspondence from Enforcement will have raised concerns that the individual does not have the right to work and you must therefore take action to investigate, as otherwise there is a risk that you could continue employment when you had ‘reasonable cause to believe’ that the individual did not have the right to work – thereby opening yourself up to much more serious sanctions.
You will need to discuss your concerns regarding the right to work with the employee and provide them with a suitable length of time in which to provide you with evidence. You will need to be mindful of employment law obligations at this stage, as this discussion could eventually lead to suspension from work or dismissal on the basis of not having the right to work.
In preparing your response to Enforcement, you will need to re-trace your steps through all the right to work checks you have carried out for the person in question. You will need to provide copies of the checks as well as the date of each check.
First right to work check completed before the employee started work,
It is easy to think that a right to work check carried out at some point on the first day will be sufficient. Unfortunately this is not the case and the check must be carried out before employment begins, i.e. on a day before the first day or before the contractual start time on the first day itself.
You should have copies on file, clearly dated before employment started. A note should be included on the copies confirming that the originals were seen and verified.
Right to work guidance sets out specific documents that are acceptable either alone, or in combination, to evidence the right to work. It also explains whether the right to work check will cover the individual’s entire employment, or whether repeat checks will be required.
Only specified documents will provide a defence against an illegal working fine. Due to the COVID-19 pandemic, since March 2020 the Home Office has altered its usual right to work check requirements on a temporary basis.
If the documents you checked were in list B, then repeat right to work checks will have been required. This process must be started before the listed expiry date.
In the case of a visa expiry date, you must be satisfied that a further application has been submitted before the visa expiry date but remains under consideration by UKVI. You may wish to retain a copy of the submitted application form, for example, in evidence of this. Once you are satisfied that an application has been made, you have a 28 day grace period, during which you must contact the Employer Checking Service and receive a Positive Verification Notice.
Whatever your internal investigation finds – whether your right to work checks are up to scratch or not – you will want to present your findings in the best possible light when responding to the Information Request.
If minor weaknesses are identified in the right to work checks or your visa tracking systems, it would be beneficial to address these internally immediately. This may be in the form of new processes, and identifying more suitable staff to complete these activities, and/or providing refresher training on the necessary steps to current responsible staff. Where you identify that right to work checks have not been completed correctly, you can’t correct this retrospectively, but you can show new robust systems to ensure it does not happen again.
If major issues are identified in your processes, such that you ultimately have concerns regarding the right to work for other employees, you may need to carefully consider whether you need to report your suspicions to Enforcement.
The response to Enforcement and these early steps to mitigate the risk of a fine are of course particularly important for organisations relying on donors and volunteers, as they won’t want negative publicity regarding resources being ‘wasted’ on enforcement matters.
On receipt of an Information Request, immediate contact can be made with Kingsley Napley’s immigration team. We are experienced in assisting charities in these types of crisis and also encourage charities to be proactive and seek advice to have robust processes in place to help avoid being faced with the potential of receiving an Information Request in the first place.
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