Picture this: a new hire joins your organisation, and everything seems in order, but months later, an audit reveals gaps in their Right to Work and background checks. Suddenly, your business is at risk, facing legal penalties, reputational damage, and even the possibility of losing its operating license.
Unfortunately, this isn’t just a hypothetical scenario. It’s a reality for many businesses in the regulated sectors that, despite their best intentions, may inadvertently overlook compliance requirements when hiring and onboarding new staff or ensuring ongoing checks for existing staff.
With evolving legislation and stricter enforcement, ensuring compliance isn’t just a box-ticking exercise; it’s an important responsibility. But it doesn’t have to be overwhelming. With the right tools, you can streamline employee screening and ensure compliance with general and industry-specific regulations.
Let’s explore the key legal requirements and how businesses can stay ahead.
The legal framework: what employers need to know
Regulated sectors, such as financial services, legal services, healthcare, education, security, etc., are bound by strict hiring regulations designed to prevent fraud, safeguard sensitive information, and protect vulnerable people. Here are a few key legal requirements that firms must follow:
1. Right to Work checks
Under the Immigration, Asylum and Nationality Act 2006, UK employers must verify that every employee has the legal right to work in the country. Failure to conduct proper Right to Work checks can result in civil penalties of up to £60,000 per illegal worker. In severe cases, a criminal conviction carrying a prison sentence of up to five years and an unlimited fine can also be imposed.
For more information, refer to the UK Gov’s employer’s guide to right to work checks.
With the introduction of digital identity verification via the UK Digital Identity and Attributes Trust Framework, businesses can now conduct these checks remotely, using government-certified Identity Service Providers (IDSPs) that employ Identity Document Validation Technologies (IDVT). This not only reduces risks but also ensures compliance.
2. Criminal record checks
Certain employment and positions in sectors, such as financial services, healthcare, education, etc., require Disclosure and Barring Service (DBS) checks to assess candidates’ criminal records to help employers make safer recruitment decisions. The level of check (basic, standard, or enhanced) depends on the role and industry.
Under the Rehabilitation of Offenders Act 1974 and the Police Act 1997, employers have a duty to ensure that individuals in positions of trust do not pose a risk to clients or the public.
You can refer to the UK Gov’s guidance for employers on DBS checks to find out more on how to apply, register with the DBS and understand the code of practice.
3. AML roles in the legal sector
In addition to the standard employment checks, The Legal Sector Affinity Group (LSAG) guidance requires firms to conduct suitability screening on Beneficial Owners, Officers, and Managers (BOOMs) and frontline AML staff prior to and during their employment. This screening may include criminal records, financial integrity, references, adverse media, and other checks tailored to the individual’s risk profile and role within the organisation.
Section 9.4 of the LSAG guidance provides a list of employee screening checks that practices should consider. Law firms must ensure they have robust screening processes in place to comply with LSAG recommendations and the Money Laundering Regulations 2017.
4. FCA-regulated roles
For firms operating in financial services, hiring compliance goes beyond identity verification and background checks. The Financial Conduct Authority (FCA) mandates that firms assess the fitness and propriety (F&P) of candidates for senior roles under the Senior Managers and Certification Regime (SMCR), considering factors such as:
- Honesty, integrity, and reputation
- Competence and capability
- Financial soundness
For further information on F&P checks, please refer to the guidance provided by the FCA.
A smarter way to stay compliant
In today’s fast-paced hiring environment, manually managing hiring compliance can be inefficient and prone to human error. By leveraging technology, businesses can safeguard themselves from penalties, enhance hiring efficiency, and cultivate a trustworthy workforce, all while maintaining full alignment with UK regulations
That’s why more regulated businesses are turning to digital solutions like Amiqus, which offers best-in-market verification and onboarding solutions in one easy-to-use platform. See how the Amiqus platform works.
As an accredited IDSP under the UK Trust Framework, Amiqus ensures that verification checks are conducted to the highest standards and manages comprehensive employee screening along with specific requirements for hiring in regulated sectors, allowing you to benefit from:
- An 80% reduction in pre-employment screening time
- Candidate verification that is 4 times faster
- DBS checks that are up to 60% quicker
- The ability to offer a start date to candidates in as little as 2 days
- A saving of 15-30 minutes per candidate on references
Are you confident in your hiring compliance? Let’s discuss how we can help you elevate it to the next level.
