Employment

Joanne Leach
November 2024

Senior Associate and employment law specialist Joanne Leach comments on the new laws just introduced that will ban bosses who fail to pay their staff the minimum wage from hiring workers from abroad for up to two years.

Joanne’s comments were published in Personnel Today, 28 November 2024, and can be found here.

“Tougher rules to prevent companies exploiting cheap foreign labour are certain to be welcomed. Workforces are strengthened by the diversity brought to organisations by migrant workers and those individuals deserve not to be exploited.

“However, extending the power of Home Office officials to withdraw a company’s sponsorship licence if they breach employment laws could have potentially catastrophic consequences for businesses which rely on an overseas workforce. This announcement should therefore serve as a wake-up call to all employers that they must comply with employment laws as well as immigration rules.

“The government’s intention to expand the circumstances in which sanctions can be issued to include employment law breaches and extend the penalty from being banned from hiring overseas workers from one year to two will shift the compliance landscape considerably. However, it seems that the proposed expansion only applies to companies. It may be more effective to increase the sanctions on individuals who facilitate these breaches – perhaps further changes are to come before the draft legislation reaches parliament.

“It is uncertain when we can expect this law to come into effect. Companies effectively have a grace period to get their house in order. To do so, they should be taking an active approach to ensure compliance in all areas. Employers should review their policies and procedures to ensure they are up to date and meet minimum standards.

“It is hoped the government also consults early as to how this change can be implemented. It is unclear how a company will be judged to be in breach of employment laws – will this finding derive from a successful employment tribunal claim or will a new regulatory body be tasked with assessing failure to comply with minimum standards?”

If you would like some advice on how these new regulations might impact you as an employer, please contact our Employment team.