The penalties which can be levied against employers and landlords who, respectively, employ or rent property to overseas nationals who are in the UK illegally, are to be substantially increased from 2024. The Government announced on 7 August that the hike in these penalties is part of a range of measures to further deter illegal migration through “small boat crossings”.



The current penalty where an employer is found to have employed a worker illegally is £15,000 per worker for the first offence, and £20,000 per worker for further offences. The new penalties will be £45,000 and £60,000 respectively, a three-fold increase.

The pecuniary punishment should be considered alongside the full range of implications an employer liable for illegal working can be subject to: reputational damage from the public record of the offence, harm to business continuity from the sudden loss of staff, the time and cost of dealing with an illegal working situation, and risk of Sponsor Licence compliance audit and/or suspension/revocation. In serious incidents of illegal working, criminal charges may also be brought. This is, of course, if the business can continue operating at all given the financial catastrophe that such fines can cause, especially if multiplied.



For landlords, the current penalties for renting to those without a visa is between £80 – £500 per lodger, and £1,000 – £3,000 per occupier. These penalties will be dramatically increasing to £5,000 – £10,000 per lodger and £10,000 – £20,000 per occupier. Additional punishments for landlords may also include criminal charges in serious circumstances.

The risk to landlords is particularly high given there is a positive obligation to report when a lodger/occupier no longer has the right to rent in the UK.


Right to Work and Rent Checks

Both employers and landlords can protect themselves by carrying out a compliant right to work or rent check. This involves checking the individual’s passport or visa, either in original format or by using the Home Office’s online checking service and obtaining a share code from the visa holder. An appropriate record must be kept of the check carried out, and close attention should be paid to ensuring the correct process is followed. A compliant check gives a Statutory Excuse which is a defence against liability where illegal working or renting is identified. Follow-up checks are also required to maintain that Statutory Excuse where an individual’s visa expires during the period of employment or residence.

What constitutes a compliant check has changed significantly over the last few years and many employers and landlords may not be up to date on the correct processes and acceptable documents, leaving them at risk. It is strongly recommended to review and update processes to ensure compliance.


Penalties as a Deterrent?

The numbers seem dramatic: a three-fold increase for employers and up to 12 times the current penalty for landlords. However, these figures are not necessarily what the Government will receive. For example, it is possible to appeal against the issue of a civil penalty, where it is incorrectly issued. It is (currently) possible to reduce the amount of the fine by 30% if it is paid within 21 days of issue. The amount of the fine may also be reduced if the relevant employer has, e.g. voluntarily reported the illegal working. This is assuming the organisation has not gone into insolvency and the fine becomes an unsecured creditor with who-knows-what chance of getting paid.

Questions are once again being raised of the tangible deterrence the civil penalty system plays in the overall strategy to prevent illegal migrants coming to the UK. How much of a difference will increasing the penalty amount make when the civil penalty scheme, in its current form, has been place since May 2014 with minimal reduction in illegal migrant numbers? Despite the Government accepting the 2019 recommendations of the Independent Chief Inspector of Borders and Immigration to review using penalties as a deterrent, it appears to be doubling down on the policy with little evidence of its effectiveness.


Undesirable Consequences

By far the largest increase in civil penalties for illegal working or renting has been levied against landlords. It is arguable that casual landlords are less likely than even small employers to have access to specialist lawyers to be able to understand what is required of them, leaving them at even greater risk. The Government has made no secret of its ambition to “stop the boats” and these increases are likely to be viewed as a further instalment of former Home Secretary Theresa May’s “hostile environment”.

Enforcement visits are on the rise again, having taken a nosedive during the pandemic, in a bid to further deter illegal working/renting. As the number of penalties issued is still quite short of 2019 levels, a focus on inspections and enforcement visits is likely to form part of the further consultation due to be held later this year. Sponsor Licence holders may notice an increase in compliance visits to ensure they are complying with their sponsorship duties.

Whilst it is fair to incentivise compliance with prevention of illegal working and renting laws (and deter non-compliance), the current system does not have much wiggle room for when something just goes wrong. It is not a fail-safe system by any means. Mistakes happen. Human error cannot be completely eliminated. The lessons from the Windrush review do not seem to have been learned and the continued reliance on a penalty-based deterrence as a mechanism to address illegal migration risks causing disproportionate and immeasurable harm to individuals and businesses who should not be subjected to the worst effects of the Government’s hostile environment.


Written by Victoria Welsh, Immigration Partner at Laytons ETL