Outsourcing right to work checks leaves employers at risk of paying significant fines

Employers are required to carry out right to work (RTW) checks on all employees. When done correctly, RTW checks establish a statutory excuse against liability for a civil penalty if it’s later discovered that an employee has lost their right to work. Establishing a statutory excuse is the main reason most employers carry out right to work checks, yet many businesses aren’t as well protected as they think.  

Many employers, including NHS Trusts, universities and high street brands outsource their right to work checking processes to well-known third-party companies. They do this to save time and because they believe the companies are better placed to ensure their right to work checks are being completed correctly. However, these employers are unaware that, other than checks undertaken on British and Irish nationals, third party checks provide no statutory excuse and no protection at all in the event of an illegal working finding.

Guidance from the Home Office has highlighted significant implications for employers who rely on third-party providers for these checks.

Understanding the Issue

Home Office guidance explicitly states that employers cannot establish a statutory excuse if a right to work check is performed by a third party, except when using an IDSP for checks on British and Irish citizens with valid passports or a passport card (Irish citizens).
This means that any check undertaken by a third-party leaves employers vulnerable to civil penalties for illegal working.

Role of Third-Party Providers

A third party is any person or organisation other than the direct employer. This includes all IDSPs, such as Trust ID and Experian. While third parties can support employers by providing technical knowledge or specialist equipment to prevent illegal working, they cannot provide a statutory excuse for checks on overseas nationals.

Why This Matters

The consequences of employing individuals without the legal right to work are severe. 
Employers found to be in violation face a civil penalty ranging from £45,000 to £60,000 per illegal worker.

Additionally, the Home Office will publish the finding of illegal working, which could lead reputational damage.

Employers may also lose their sponsor licence, resulting in the cancellation of all visas held by their sponsored workers.

While more serious consequences apply when a breach is deliberate, inadvertent failures to secure a statutory excuse by using third-party providers can still result in significant penalties.

High-Risk Circumstances

The highest risk arises when employing individuals with time-limited visas. These employees may have the right to work at the commencement of their employment but could lose this right during their employment.

If the employer had conducted the right to work check themselves, they would have a statutory excuse and could defend against a civil penalty, even if the employee is later found to be working illegally.

However, if a third party conducts the check, the employer has no statutory excuse and no defence against a civil penalty.

Considerations for Employers

Employers must carefully evaluate their use of third-party providers for right to work checks. 
While these services can save time and create consistent processes, they do not provide a statutory excuse for overseas nationals. 
To protect their businesses, employers should:

• • establish a system for undertaking all right to work checks on overseas nationals directly
  • identify any overseas nationals currently employed whose RTW check was carried out by a third party, review RTW expiry dates, ensure that the repeat check is foolproof and that repeat checks are undertaken when required; and
  • review terms and conditions with any third party to ensure that there is adequate redress in the event that the Home Office issues a penalty, they suffer reputational damage and/or face the loss of their sponsor licence.

Employers must remain vigilant in conducting right to work checks to avoid severe legal and financial consequences. Relying on third-party providers, except for checks on British and Irish nationals, exposes employers to significant risks.