The illegal working penalty UK employers face in 2026 is among the highest it has ever been. Following significant increases introduced in January 2024, employers who hire workers without the right to work in the UK now face civil penalties of up to Β£60,000 per worker. In addition, criminal prosecution remains a risk for employers who knowingly employ illegal workers.
Understanding exactly how the penalty scheme works, what triggers a penalty, and how conducting the correct right to work checks protects your business is essential for every UK employer in 2026.
In this guide, we explain the full penalty structure, how the Home Office investigates employers, what a statutory excuse is, and what steps you must take to protect your business.
What is the illegal working penalty?
The illegal working penalty is a civil financial penalty imposed by the Home Office on employers who are found to have employed a person who does not have the right to work in the UK. It is part of the civil penalty scheme operated under the Immigration, Asylum and Nationality Act 2006.
The penalty applies when:
- You employ someone who has no permission to work in the UK at all
- You employ someone whose visa does not permit them to work
- You employ someone who is working in breach of their visa conditions, for example working more hours than their visa permits or working in a sector not covered by their visa
Therefore, the penalty can apply even when the worker appeared legitimate. This is why conducting proper right to work checks before every new employee starts is so important.
How much is the illegal working penalty in 2026?
The Home Office significantly increased the civil penalty amounts in January 2024. These rates remain in force in 2026.
| Breach type | Maximum penalty per illegal worker |
|---|---|
| First breach | Β£45,000 per worker |
| Repeat breach (within 3 years of a previous penalty) | Β£60,000 per worker |
These figures represent the maximum penalty. The actual amount the Home Office imposes depends on several factors, including whether you conducted any right to work checks, how many illegal workers were employed, and whether you cooperated with the investigation.
The Home Office applies a penalty calculation framework that can reduce the penalty below the maximum in some circumstances.
How does the Home Office calculate the penalty amount?
The Home Office starts at the maximum penalty and applies reductions based on your conduct. The calculation works as follows:
Starting point: maximum penalty
- First breach: Β£45,000 per worker
- Repeat breach: Β£60,000 per worker
Reductions applied for mitigating factors:
| Mitigating factor | Reduction |
|---|---|
| You reported the worker to the Home Office yourself | One third reduction |
| You cooperated fully with the Home Office investigation | One third reduction |
| You had effective right to work checking systems in place | One third reduction |
Therefore, if all three mitigating factors apply, your penalty could be reduced by two thirds. For a first breach, this would reduce a Β£45,000 penalty to Β£15,000 per worker.
However, if none of the mitigating factors apply, you face the full maximum penalty. In addition, each illegal worker is counted separately. Therefore, an employer found to have five illegal workers at the first breach rate could face a total penalty of Β£225,000.
What is a statutory excuse?
A statutory excuse is a complete defence against the illegal working civil penalty. If you have a valid statutory excuse, the Home Office cannot impose a penalty on you even if you unknowingly employed someone without the right to work.
You have a statutory excuse if you conducted a correct and timely right to work check before the employee started work and the check was compliant with the Home Office code of practice.
A statutory excuse does not protect you from criminal prosecution if you knowingly employed an illegal worker. However, it protects you from the civil penalty scheme.
Therefore, conducting the correct right to work check before every new employee starts is not just good practice. It is the single most important thing you can do to protect your business from the illegal working penalty.
How to conduct a right to work check
The Home Office requires employers to carry out a right to work check using one of three methods:
Method 1: Manual document check
You check and copy original documents from the Home Office approved list. The check must be carried out in the physical presence of the employee. You must:
- Obtain the original document from the employee
- Check the document is genuine and belongs to the employee
- Check the employee is allowed to do the work you are offering
- Make a clear copy of the document
- Record the date the check was carried out
Acceptable documents include a British or Irish passport, a biometric residence permit, a settled status share code, or other documents on the Home Office list. The full list of acceptable documents is published in Appendix D of the Home Office employer’s guide.
Method 2: Online right to work check
For most non-British and non-Irish employees, you conduct the check using the Home Office online checking service at gov.uk. The employee provides you with a share code and their date of birth. You enter these details into the online service to verify their right to work status.
The online check is now the standard method for employees with a biometric residence permit, an eVisa, or settled or pre-settled status under the EU Settlement Scheme.
Method 3: Employer Checking Service
In some circumstances, you must use the Employer Checking Service (ECS). This applies where:
- The employee has an outstanding immigration application or appeal and cannot provide documents or a share code
- The employee has an Application Registration Card
- The employee’s documents are held by the Home Office
If the ECS confirms the employee has the right to work, you receive a Positive Verification Notice, which gives you a statutory excuse for 6 months.
When must right to work checks be carried out?
Right to work checks must be carried out before the employee starts work. Conducting the check after employment begins does not give you a statutory excuse for the period before the check was done.
In addition, for employees with time-limited permission to work, you must carry out a follow-up check before their current permission expires. If you fail to conduct a follow-up check and the employee continues working after their permission has expired, you lose your statutory excuse from that point.
The timing of follow-up checks depends on the employee’s visa expiry date. Set calendar reminders for every employee with a time-limited right to work to ensure you never miss a follow-up check deadline.
What is a criminal offence for illegal working?
In addition to the civil penalty, employers face criminal prosecution for knowingly employing an illegal worker. This is a significantly more serious consequence than the civil penalty.
Under the Immigration, Asylum and Nationality Act 2006, knowingly employing an illegal worker carries:
- A maximum sentence of 5 years imprisonment
- An unlimited fine
- A criminal record
The criminal offence requires proof that you knew or had reasonable cause to believe the worker did not have the right to work. Therefore, turning a blind eye to obvious warning signs is not a defence.
In addition, directors and senior managers can be personally prosecuted even where the offence was committed by an employee acting on behalf of the company. Therefore, implementing robust right to work checking procedures across your entire organisation is essential.
What triggers a Home Office investigation?
The Home Office investigates employers suspected of employing illegal workers through several means:
- Intelligence tips – reports from members of the public, employees, or other businesses
- Immigration enforcement raids – unannounced visits to business premises
- Referrals from other government departments – HMRC, the Gangmasters and Labour Abuse Authority (GLAA), or the police
- Complaints from former employees – particularly in industries with high staff turnover
- Data matching – cross-referencing employer records with immigration records
Therefore, the Home Office does not only investigate employers who are reported. It actively conducts enforcement operations in sectors with historically high rates of illegal working, including hospitality, construction, agriculture, care, and cleaning.
Sectors at highest risk of illegal working penalties
Certain industries face higher Home Office enforcement activity. Employers in these sectors must be especially vigilant:
- Hospitality – restaurants, cafes, bars, and hotels
- Construction – particularly subcontracted labour chains
- Agriculture and food processing – seasonal and migrant workforce
- Social care – care homes and domiciliary care providers
- Retail – particularly convenience stores and market traders
- Cleaning and facilities management
- Beauty and personal care – nail bars, hair salons
In addition, businesses that use labour provided by third-party agencies must still conduct right to work checks on those workers. You cannot rely on the agency having conducted the check on your behalf. The responsibility remains with the employer.
How to appeal an illegal working penalty
If the Home Office issues you with a penalty notice, you have the right to object and appeal. The process is:
Objection: You can object to the penalty within 28 days of receiving the penalty notice. Submit your objection in writing to the Home Office, explaining why you believe the penalty is wrong or should be reduced. The Home Office will review your objection and issue a new decision.
Appeal to the county court: If you are not satisfied with the outcome of your objection, you can appeal to the county court within 28 days of the objection decision. The court will assess whether the penalty was correctly imposed and whether the amount is appropriate.
Therefore, if you receive a penalty notice, act immediately. The 28-day deadline for objection is strict. Missing it significantly limits your options.
Consequences beyond the financial penalty
The illegal working penalty has consequences beyond the immediate financial cost. These include:
Sponsor licence suspension or revocation If you hold a sponsor licence and the Home Office finds illegal workers during an investigation, your sponsor licence is likely to be suspended or revoked. This prevents you from employing overseas workers on work visas and can devastate businesses that rely on sponsored staff.
For more information on sponsor licence suspension, read our UK sponsorship licence suspension guide.
Reputational damage: The Home Office publishes the details of employers who receive civil penalties above a certain threshold. This public record can damage your reputation with customers, suppliers, and potential employees.
Disqualification from public contracts: Employers with illegal working convictions or significant civil penalties may be disqualified from bidding for public sector contracts. In addition, some industry licensing bodies take illegal working findings into account when assessing licence renewals.
Directors disqualification: In serious cases involving criminal prosecution, directors involved in employing illegal workers can be disqualified from acting as company directors.
The right to work checking code of practice
The Home Office publishes a Code of Practice on preventing illegal working. This document sets out exactly what employers must do to establish a statutory excuse. Every employer with staff should read and follow this code.
Key principles of the code include:
- Checks must be carried out consistently for all new employees, regardless of nationality
- You must not discriminate by only checking employees who appear to be foreign nationals
- Copies of documents must be kept for the duration of employment plus 2 years after it ends
- Online checks must be done using the official Home Office service, not third-party tools
- Documents must be checked in the physical or live video presence of the employee
Failing to follow the code does not automatically result in a penalty. However, it does mean you cannot claim a statutory excuse if an illegal worker is later discovered.
How LawSentis can help with illegal working compliance
LawSentis is regulated by the Immigration Advice Authority (IAA) at Level 3, which is the highest level of authorisation in the UK. We advise UK employers on all aspects of immigration compliance, including right to work procedures, sponsor licence obligations, and responding to Home Office investigations.
Our team can:
- Review your current right to work checking procedures and identify gaps
- Train your HR team on conducting compliant right to work checks
- Advise on the correct checking method for different categories of employee
- Help you respond to a Home Office penalty notice or investigation
- Prepare objections and appeal submissions to challenge a penalty
- Advise on the impact of an illegal working finding on your sponsor licence
- Conduct a full immigration compliance audit of your workforce
In addition, if you hold or are applying for a sponsor licence, we advise on all ongoing sponsor duties including reporting obligations, record keeping, and compliance visits. Read our sponsor licence application guide and sponsor licence suspension guide for more information.
Book a consultation with LawSentis today. We will review your compliance position and advise on the steps you need to take to protect your business from the illegal working penalty.
Frequently asked questions
How much is the illegal working penalty in the UK in 2026?
The maximum civil penalty is Β£45,000 per illegal worker for a first breach and Β£60,000 per worker for a repeat breach within 3 years. The actual amount depends on mitigating factors including whether you conducted right to work checks, cooperated with the investigation, and reported the worker yourself.
What is a statutory excuse?
A statutory excuse is a complete defence against the illegal working civil penalty. You have a statutory excuse if you conducted a correct and compliant right to work check before the employee started work. Even if the employee later turns out not to have the right to work, the Home Office cannot impose a penalty if your check was done correctly.
How do I conduct a right to work check?
You can check original documents from the Home Office approved list, use the online right to work checking service for employees with an eVisa or settled status share code, or use the Employer Checking Service for employees with a pending immigration application. The check must be done before the employee starts work.
Can I be prosecuted as well as fined?
Yes. Knowingly employing an illegal worker is a criminal offence carrying up to 5 years imprisonment and an unlimited fine. The civil penalty applies even without knowledge. The criminal offence requires proof that you knew or had reasonable cause to believe the worker was not permitted to work.
What sectors does the Home Office target most?
The Home Office focuses enforcement activity on hospitality, construction, agriculture, social care, retail, cleaning, and beauty sectors. However, all employers are subject to the illegal working penalty scheme regardless of sector.
Can I appeal an illegal working penalty?
Yes. You can object to the penalty within 28 days of receiving the notice. If unsatisfied with the outcome of the objection, you can appeal to the county court within 28 days of the objection decision. Act immediately as these deadlines are strict.
Does an illegal working finding affect my sponsor licence?
Yes. If you hold a sponsor licence and the Home Office discovers illegal workers during an investigation, your licence is likely to be suspended or revoked. This can prevent you from hiring overseas workers on work visas.
Do I need to carry out follow-up right to work checks?
Yes. For employees with time-limited permission to work, you must carry out a follow-up check before their current permission expires. Failing to do so means you lose your statutory excuse from the point the permission expires.
Can I rely on an agency to do the right to work check?
No. Even if you use agency workers, the responsibility for conducting right to work checks remains with you as the employer. You cannot rely on the agency having done the check.
How long must I keep right to work check records?
You must keep copies of right to work documents for the duration of the employee’s employment plus 2 years after it ends.
Note:
This article is for general information only. Immigration rules change frequently. Always seek advice from an IAA-regulated immigration adviser before making any application.
LawSentis is regulated by the Immigration Advice Authority (IAA) at Level 3. Contact us for professional advice.