Is your construction business ready for a Home Office audit?

The government’s intelligence-driven illegal working programme introduces strict penalties for non-compliant employers, including financial penalty notices, business closure orders and potential imprisonment.

Illegal working in construction

Illegal working is a growing issue for construction companies. Statistics released on 31 October 2024 show that civil penalties for illegal working at certain construction companies ranged from £15,000 to £75,000.

These financial penalties can have significant knock-on effects on business operations, including impacting health and safety and safeguarding obligations, invalidating insurance, causing reputational damage, and disrupting business operations and hiring practices.

This is especially crucial during a time when the sector is experiencing labour shortages caused by the ending of free movement from the EU.

Positive steps in the industry

Despite these challenges, the industry is taking proactive steps to help construction businesses better understand immigration rules.

For example, the Considerate Constructors Scheme has partnered with the Home Office to create a Best Practice Hub.

The hub provides compliance toolkits, checklists, case studies, examples of best practice, and access to Home Office resources on immigration rules, including informative right to work videos and guidance on key illegal working legislation.

The solution: right to work checks

The solution is straightforward: construction employers must carry out right to work checks before hiring workers.

This process involves three key steps: use, satisfy and retain.

1. Use the Home Office’s online right to work checking service regarding the employee. The checks must confirm that they are entitled to do the work in question.
2. Satisfy yourself that any photograph on the online right to work check is of the individual presenting themselves for work (this check can be done in person or via a video call).
3. Retain a clear copy of the response provided by the online right to work check (storing that response securely, electronically or in hardcopy).

Although it can be challenging for construction companies to track subcontractors (for example, those working on site), employers are still strongly encouraged to ensure their contractors and labour providers also carry out right to work checks.

Even if a worker is not a direct employee (for instance, if they are self-employed), and an employer is not required to establish a statutory excuse against liability for a civil penalty, it is still best practice to perform these checks and retain evidence of their completion.

Sponsor licence holders’ responsibilities

Employers who hold a sponsor licence have specific reporting and record-keeping duties.

They must report significant changes to a sponsored worker’s circumstances, such as salary changes or changes in job role.

Additionally, they must keep certain documents for each worker. Appendix D of the Home Office sponsor guidance outlines which documents need to be retained and for how long.

Our recent experience is that the construction sector is considered high risk for immigration compliance and so government audits are more likely. This means that compliance gaps are potentially higher risk for the sector.

Preparing for Home Office visits and inspections

To safeguard construction businesses, it is important to be prepared for impromptu Home Office visits and inspections. Employers should:

• Ensure that right to work checks are completed.
• Review employment contracts.
• Require subcontractors to confirm that all workers have the right to work.
• Implement a record-keeping system.
• Use digital tools for online right to work checks, which can streamline the process on site.

By staying compliant, businesses can protect themselves from potential penalties and sanctions, ensuring their operations remain smooth and legally secure.

Anna Maria Kattavenos is a senior immigration consultant at Fragomen.