As immigration law in the UK continues to evolve, so do the rules surrounding sponsor licences and employer compliance obligations. Employers must remain vigilant and well-informed to avoid severe penalties and protect both their workforce and their business reputation.

Recent reports from the National Audit Office (NAO) and the Home Office reveal growing enforcement measures, increased revocations of sponsor licences, and widespread employer misunderstandings regarding Right to Work (RTW) checks. This article explores the key findings from these reports and provides practical guidance on staying compliant.

Stricter Enforcement Under the Skilled Worker Visa Route

The NAO's March 2025 report highlighted several issues within the Skilled Worker visa route. Initially, the Home Office was slow to detect risks of non-compliance and exploitation. However, in response to growing concerns, enforcement efforts have significantly increased.

New strategies now include:

• Digital audits
• Targeted compliance checks
• Fraud detection technologies

These efforts have already produced measurable results. The number of sponsor licence revocations has risen dramatically—from 273 in 2022 to nearly 1,500 in 2024. Despite these interventions, the NAO warned that only 1% of sponsors have undergone compliance checks, largely due to resource constraints. As a result, there remain large enforcement gaps that allow non-compliance and exploitation to go unchecked.

A further concern raised by the NAO was the lack of comprehensive data, which continues to hinder effective risk mitigation, especially when it comes to protecting vulnerable migrant workers.

Home Office Research: Employer Awareness of Right to Work Checks

On 1 April 2025, the Home Office published a report titled “Employer Awareness of and Self-Reported Compliance with Right to Work Checks.” This research revealed that while most employers are aware of the obligation to carry out checks, many lack in-depth understanding of how and when to conduct them properly.

Key Findings:

• 89% of employers correctly identified that all employers in the UK are responsible for conducting Right to Work checks.
• 96% recognised that holding a UK or Irish passport confirms an employee's right to work.
• However, significant gaps in understanding were found. Some employers incorrectly believed that third parties or employees themselves are responsible for carrying out these checks.
• Many employers selected the wrong documents when asked which ones are acceptable for proving the right to work.
• There was also confusion about when to recheck documents, particularly among small employers and those in the construction sector.

Even though employers generally understood what details to check during a manual RTW check, they showed weaker knowledge in two critical areas:

• Record keeping
• Rechecking visas for employees with time-limited status

This knowledge gap becomes a serious issue when an employee’s immigration status changes—such as when a student visa expires, but the employer continues to allow the same working hours. In such cases, the employee could unknowingly become an overstayer, and the employer risks hiring someone without the right to work.

The report also found that:

• 62% of micro and small employers wrongly believed that a driving licence could be accepted as proof of the right to work.
• 37% of micro and small employers said they retained IDSP (Identity Document Service Provider) records only for the duration of employment, instead of the required period: employment duration plus two years.
• 81% of employers mistakenly thought that recruitment agencies are responsible for conducting Right to Work checks.

Employers that hire zero-hours workers were flagged as being at increased risk of non-compliance, often answering key compliance questions incorrectly.

These findings underscore the urgent need for improved awareness and training, especially among small and micro businesses, to prevent serious compliance failures.

Understanding the Purpose of Right to Work Checks

Right to Work checks are not merely administrative requirements—they serve several crucial purposes:

• Preventing illegal immigration
• Protecting migrant workers from exploitation
• Ensuring that only individuals with legal status are employed
• Maintaining fair wages according to the UK’s occupation codes
• Promoting fairness in the labour market

Employers must ensure they are hiring individuals who:

• Have valid immigration status
• Are permitted to work in their roles
• Are paid in accordance with minimum wage requirements for their specific occupation

What Employers Must Do: The Three Key Compliance Duties

Every employer in the UK must meet three essential obligations:

1. Verify Right to Work: Check that the employee has the right to work in the UK.
2. Maintain Records: Keep clear records of the checks and supporting documents.
3. Follow Up: Conduct follow-up checks for employees with a time-limited right to work.

Failing in any of these areas can lead to serious consequences.

How to Carry Out Right to Work Checks

Employers can conduct RTW checks through three approved methods:

1. Manual Check

This method applies to all employees, regardless of nationality.

• Employers must physically examine original documents such as a passport, birth certificate, or NI number evidence.
• They must ensure the documents are genuine, relate to the individual, and allow them to carry out the work.
• Employers must make clear copies, annotate them with the date of the check, and retain these for compliance purposes.

2. Online Check (Home Office Service)

This is required for foreign nationals whose immigration status can be verified online.

• The employee generates a share code through the Home Office online service.
• The employer enters this code and the employee’s date of birth on the government website to view their status.
• Employers must retain the official Home Office output confirming the individual’s right to work.

3. IDSP (Identity Document Service Provider)

Available only for British and Irish citizens with a valid passport.

• The IDSP conducts a digital identity verification.
• Employers must keep the confirmation output from the IDSP as evidence of compliance.

Consequences of Non-Compliance

The penalties for failing to carry out proper checks are severe:

• Civil penalty of up to £60,000 per illegal worker (increased from £20,000 in February 2024).
• Employers may face criminal prosecution, unlimited fines, and imprisonment.
• A business may be temporarily or permanently shut down.
• Company directors may be disqualified.
• The Home Office may revoke or suspend the employer’s sponsorship licence.
• The government can seize earnings made through illegal employment.
• Other licences, such as private hire or hospitality licences, may be reviewed or revoked.

Illegal Working Across Sectors

Despite these serious consequences, 72% of employers surveyed believed that illegal working is uncommon in their sector. However, 21% said it was common—with construction (41%) and accommodation/food service (39%) sectors being the most frequently affected.

A key reason may be that some jobs—such as driving or legal positions—require official certifications that act as a natural compliance filter. In contrast, roles such as chefs, construction workers, or plumbers, which involve manual labour, often do not require official qualifications, making it easier for undocumented workers to go undetected.

This misjudgment can have serious long-term consequences for both employers and employees, including increased risk of exploitation and harsher enforcement actions.

The Compliance Challenge for Micro and Small Businesses

Small and micro businesses face unique risks:

• They often lack in-house HR teams.
• RTW checks may fall to business owners or managers who lack formal training.
• There is usually no structured compliance system in place to track visa expirations or recheck statuses.

These gaps make them more vulnerable to accidental breaches and disproportionately subject to enforcement action.

Conclusion: Building a Culture of Compliance

The legal, financial, and reputational risks associated with Right to Work non-compliance cannot be overstated. With increased enforcement and harsher penalties in place, employers must act decisively to:

• Invest in staff training
• Implement clear record-keeping protocols
• Use digital tools or IDSPs where appropriate
• Carry out ongoing compliance reviews

By doing so, businesses not only protect themselves from punitive action but also support a fair, safe, and law-abiding labour market for all.