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Employing staff from overseas - a legal guide

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• Do you wish to employ staff from overseas?
• Do you know how to establish whether a prospective employee is legally entitled to work in the UK?
• Are you aware that from 29 February 2008, employers who negligently hire illegal workers face a fine of up to £10,000 for each offence and those who knowingly hire illegal workers risk an unlimited fine and/or a prison sentence of up to two years?

This article provides guidance for employers on what they need to check before employing staff from overseas. It will also briefly outline the new points-based immigration system the Government will start introducing from March 2008 to manage the flow of overseas workers to the UK.

Who is entitled to work in the UK?

(1) Nationals of a pre 1994 member state of the European Union (Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Spain, Sweden and the UK)

(2) Nationals of a pre 1994 member state of the European Economic Area (in addition to the above, Norway, Iceland and Liechtenstein)

(3) Swiss nationals

are generally free to take employment in the UK.

What about nationals of the new EU member states?

Nationals of the eight countries that joined the EU in May 2004 (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia, known as “A8”) are generally required to register with the Home Office under the Worker Registration Scheme when they take work in the UK. It is an offence for an employer to employ an A8 national without the employee being registered. Once an employee has been working in the UK legally for 12 months without a break in employment, the requirement to register no longer applies and they can obtain a residence permit confirming their right to live and work in the UK.

Nationals of Romania and Bulgaria (known as “A2” countries) that joined the EU on 1 January 2007 generally must not start working in the UK before they get authorisation from the Home Office. It is an offence for an employer to employ an A2 national without the necessary authorisation.

To obtain authorisation, the employer has to make an application for a work permit for the prospective employee and, once approved, the employee will need to apply for an accession worker card. A work permit is not required for some categories of employees, e.g. domestic workers in a private household; postgraduate doctors, dentists and trainee general practitioners; teachers or language assistants.

What about nationals from other states?

Most nationals of other states are subject to immigration controls and require work permits subject to different eligibility requirements. From March 2008, a points-based system, similar to that operating in Australia, will begin to operate. This is geared to enable the UK to control migration more effectively, tackle abuse and identify the most talented workers. Please see below for a brief summary of the new system.

Which penalties apply under the new law?

From 29 February 2008, the Immigration, Asylum and Nationality Act 2006 will repeal section 8 of the Asylum and Immigration Act 1996 and will introduce two new penalties for employing illegal workers:
 

• An employer will be liable to a custodial sentence of up to two years and/or an unlimited fine if the employer knowingly employs an illegal worker.
• The maximum civil penalty is increased to £10,000. An employer can be fined for each person employed illegally.

Is there any defence available to employers?

An employer will have a defence if the (prospective) employee provides the employer with certain document(s) listed below (which are similar to the documents currently needed to establish a defence under section 8 of the Asylum and Immigration Act 1996). The employer must also:-

• take reasonable steps to check the validity of the document(s);
• keep copies of the document(s) for at least two years after the employment terminates;
• satisfy itself that any photograph(s) in the documents are of the (prospective) employee;
• satisfy itself that the (prospective) employee's appearance is consistent with any date of birth in the document(s);
• take all reasonable steps to check that the (prospective) employee is the rightful owner of the document(s);
• retain copies of the whole of any document(s) that are not passports or other travel documents in a format that cannot be subsequently altered; and
• copy specified pages of any passport or other travel document in a format that cannot be subsequently altered.

An employer cannot rely on the statutory defence if it has made the relevant checks but knows that the individual is not entitled to work in the UK.

Practical steps to take when employing overseas workers

Any formal offer of employment should require the potential employee to produce the necessary documentation to establish their right to work in the UK as a condition of the offer of employment. The employer must check the documents before the employment begins to meet the strict requirements of the statutory defence.

Which documents must an employer check before the employee starts work?

The documents that an employer must see in order to establish a defence to the offence include any one of the following:
 

• A passport showing that the holder is a British citizen or a citizen of the UK or colonies having the right of abode in the UK.
• A passport or national identity card showing that the holder is a national of the European Economic Area (“EEA”) or Switzerland.
• A residence permit issued by the Home Office or the Border and Immigration Agency to a national of an EEA country or Switzerland.
• A permanent residence card issued by the Home Office or the Border and Immigration Agency to the family member of a national of an EEA country or Switzerland.
• A passport or other travel document endorsed to show that the holder is exempt from immigration control, is allowed to stay indefinitely in the UK, has the right of abode in the UK, or has no time limit on their stay in the UK.
• A birth certificate issued in the UK which includes the name of at least one of the holder’s parents, when produced in combination with an official document giving the person’s permanent National Insurance Number and their name issued by a Government agency or a previous employer.
• A birth certificate issued in the Channel Islands, the Isle of Man or Ireland, when produced in combination with an official document giving the person’s permanent National Insurance Number and their name issued by a Government agency or a previous employer.
• A certificate of registration or naturalisation as a British citizen, when produced in combination with an official document giving the person’s permanent National Insurance Number and their name issued by a Government agency or a previous employer.
• A letter issued by the Home Office or the Border and Immigration Agency to the holder which indicates that the person named in it is allowed to stay indefinitely in the UK when produced in combination with an official document giving the person’s permanent National Insurance Number and their name issued by a Government agency or a previous employer.

Alternatively, an employer can also rely on the statutory defence if the prospective employee produces to the employer any of the following documents or combination of documents:
 

• A passport or travel document endorsed to show that the holder is allowed to stay in the UK and is allowed to do the type of work in question, provided that it does not require the issue of a work permit.
• A Biometric Immigration Document issued by the Border and Immigration Agency to the holder which indicates that the person named in it can stay in the UK and is allowed to do the work in question.
• A work permit or other approval to take employment issued by the Home Office or the Border and Immigration Agency when produced in combination with either a passport or another travel document endorsed to show the holder is allowed to stay in the UK and is allowed to do the work in question, or a letter issued by the Home Office or the Border and Immigration Agency to the holder or the employer or prospective employer confirming the same.
• A certificate of application issued by the Home Office or the Border and Immigration Agency to or for a family member of a national of a EEA country or Switzerland stating that the holder is permitted to take employment which is less than 6 months old when produced in combination with evidence of verification by the Border and Immigration Agency Employer Checking Service.
• A residence card or document issued by the Home Office or the Border and Immigration Agency to a family member of a national of an EEA country or Switzerland.
• An Application Registration Card issued by the Home Office or the Border and Immigration Agency stating that the holder is permitted to take employment, when produced in combination with evidence of verification by the Border and Immigration Agency Employer Checking Service.
• An Immigration Status Document issued by the Home Office or the Border and Immigration Agency to the holder with an endorsement indicating that the person named in it can stay in the UK, and is allowed to do the type of work in question, when produced in combination with an official document giving the person’s permanent National Insurance Number and their name issued by a Government agency or a previous employer.
• A letter issued by the Home Office or the Border and Immigration Agency to the holder or the employer or prospective employer, which indicates that the person named in it can stay in the UK and is allowed to do the work in question when produced in combination with an official document giving the person’s permanent National Insurance Number and their name issued by a Government agency or a previous employer.

Practical steps when checking job applications

Employers should carry out these checks on all applicants, not merely those who appear to be of non-British descent, in order to avoid race discrimination. To help employers, the Home Office has issued a code of practice on avoiding race discrimination in recruitment entitled “Guidance for Employers on the Avoidance of Unlawful Discrimination in Employment Practice While Seeking to Prevent Illegal Working”. Failure to observe the code of practice is not of itself unlawful but may be taken into account by an employment tribunal in deciding whether there has been discrimination.

The new points-based immigration system

The new system will consolidate more than 80 existing work and study application routes and award points to reflect aptitude, experience, the level of need in any given sector and the likeliness that the applicant will comply with their immigration requirements. In tiers 1 and 2, points will also be awarded for attributes such as age, previous salary or prospective salary and qualifications. For each tier, applicants will need to score sufficient points to obtain entry clearance or leave to remain in the UK.

Tier 1: Highly skilled individuals such as entrepreneurs, investors and graduate students. This is designed to replace the Highly Skilled Migrant Programme, the Entrepreneur and Investor Schemes and the International Graduates Scheme.

Tier 2: Skilled workers with a job offer to fill gaps in the UK work force

Tier 3: Limited numbers of low skilled workers needed to fill temporary labour shortages

Tier 4: Students

Tier 5: Youth mobility and temporary workers

All applicants in tiers 2-5 will need to provide a certificate of sponsorship from an approved sponsor when making an application. The certificate of sponsorship will act as an assurance that the migrant is able to do a particular job or course of study.

The sponsor’s rating / track record in sponsoring migrants will determine the number of points applicants receive for their certificate. Employers will need to obtain a license from the Home Office for the particular tier in which they wish to sponsor employees and accept certain responsibilities for their employees to help with immigration control.

Employees whose personal circumstances or route of migration suggests that they present a high risk of breaching the immigration rules will be required to provide financial securities.

Dependants of employees will be allowed under tiers 1, 2, 4 and 5. However, dependants will not be allowed to work where accompanying a student (tier 4) or a temporary worker (tier 5) who has been given less than 12 months leave in the UK.

The new system will be phased in tier by tier. According to the provisional timetable tier 1 will be launched in March 2008, tier 2 and tier 5 are scheduled to be introduced in the third quarter of 2008 and tier 4 will follow at the beginning of 2009.

Please note that this area of the law is a complex subject and you should not take or refrain from taking any step without full legal advice on your particular circumstances. The content of this article is of a general nature and no liability is accepted in connection with it or if any reliance is placed on it.

Posted February 21, 2008