It’s already important to ensure all your contractors have the right to work in the UK before you engage them, but with penalties set to increase it’s about to become more important than ever. In this article we’ll look at the rules surrounding right to work checks, and how using an umbrella company affects your responsibilities.
Employer’s duty to establish Right to Work
Each employer is responsible for checking that their employees have the right to work in the UK, before they are employed. If you engage your contractors directly through agency PAYE, you will be responsible for these checks.
For British and Irish citizens, this means physically checking their original documents – for example, their passport or passport card, or using an identity service provider. For non-British or Irish citizens, you can check their identity online if they’ve given you their share code.
Increased penalties
If you employ someone who does not have the right to work in the UK, and you can’t prove that you completed the required right to work checks, you may have to pay a civil penalty. At the time of writing the starting point for the first penalty is £15,000, with an overall maximum penalty of £20,000. This is expected to increase to a starting point of £45,000, and a maximum of £60,000 – so even though the penalties are already significant, they’re set to triple.
If your contractors are employed by an umbrella company
The worker’s employer is responsible for completing right to work checks, so if your contractors are employed by an umbrella company, they are responsible rather than you.
Most umbrella companies employ a large number of people, and few ever meet their employees in person, so they will have an online process for completing right to work checks. Illegal workers present a significant risk, so you can expect this process to be robust, and most umbrellas will not commence a contractor’s employment until they have passed their right to work process.
New umbrella contractors should be advised to treat the right to work process as important and urgent, to avoid any delay in setting up their employment with the umbrella, which may delay their payments.
If you have questions or if we can help in any way, please call our expert team on 01296 468483 or email info@orangegenie.com.