Is your employee screening process compliant?
From 1 October 2022, all UK employers, including accountancy firms, must use a government certified ‘identity service provider’ (IDSP) to digitally verify employee right to work statuses or go back to physically checking new hires’ documents in person.
Accountancy professionals and firms should use this as an opportunity to review their employee screening process to ensure it is up to date and that they are also complying with their anti-money laundering responsibilities and other professional requirements.
Whether you are conducting checks on frontline AML staff and beneficial owners, officers and managers of the firm (BOOMs), verifying the right to work status of prospective employees, or ensuring employees meet the professions ‘fit and proper’ requirements, using a government certified IDSP can help accountancy firms conduct rigorous staff vetting to mitigate the risk during the hiring process and ongoing employment.
Right to work
Whilst ‘right to work’ may seem like a simple concept, there are over 200 document combinations and this, coupled with ever-changing legislation, makes it a risky area with hefty penalties for getting it wrong.
During the COVID-19 pandemic it was impossible to meet face to face, which meant employers couldn’t carry out right to work checks in person. The Government therefore introduced a temporary easement, allowing employers to do an online check remotely, using video chat.
To mitigate the potential use of fraudulent documents but to retain the benefits of a digital solution, from 1 October 2022 employers must use a UK government certified IDSP to carry out digital right to work checks or meet candidates in person to manually verify documents.
Benefits of using a certified IDSP for Right to work checks
You can of course meet your candidates face-to-face to verify their right to work, however it is a lot more challenging to verify if a candidate’s document is legitimate by looking at it in person, not to mention unsecure. There is also a high risk of substantial fines if you make a mistake. The UK government specifies you may be penalised up to £20,000 per employee, if the correct checks have not been completed.
There are many benefits of digital identity checking, using a certified IDSP, such as:
- Significantly faster employment checks;
- Improve the security of your process by reducing fraud risk;
- Eliminate the risk of human error;
- Improve the scalability of processes to reach more candidates;
- Automate recording of transactions, document and data storage; and
- Enhance candidate experience and their perception of your business.
Ongoing AML obligations
Firms are required, under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the AML Regulations) to have appropriate internal controls in place to assess all principals, and relevant staff, subcontractors and consultants as being ‘fit and proper’. A policy should be in place to screen such relevant persons to assess their ‘conduct and integrity’, at least annually to ensure both new starts and ongoing employees are being vetted correctly.
The use of technology can help to verify the identities of employees and any beneficial owner, office or manager (BOOMs) at the firm but also screen them to check their names against PEP, sanctions and adverse media as well as criminal disclosure checks, all of which are part of these annual declarations. The process of completing a new declaration will also help to emphasise the importance of these obligations and embed ethical values within the firm.
The Anti-Money Laundering and Counter-Terrorist Financing – Guidance for the Accountancy Sector Section 3.6.22 states:
‘Businesses must consider the skills, knowledge, expertise, conduct and integrity of all relevant employees both before and during their appointment….However, it is important that businesses have a mechanism for evidencing MLTF knowledge within such procedures: for example, a test for which the results are recorded can evidence knowledge and expertise.’
Other professional obligations
In addition to the requirements to screen employees under right to work and the AML regulations, there are also a range of other situations in which employees must be assessed as being ‘fit and proper’ before being employed, during employment and in relation to specific engagements.
The ICAS Fit and proper Helpsheet in the General Practice Manual deals with this in more detail but includes requirements in relation to audit, insolvency and designated professional body investment business activities. In addition, threats to the fundamental principles under the ICAS Code of Ethics can be mitigated against with firm policies and procedures around employee screening.
While annual fit and proper declarations are helpful as part of compliance with the above, increasingly there is a need to consider whether it is enough and whether there needs to be additional work undertaken either to verify information and statements made or whether alternative and more reliable procedures can be used. For example, rather than simply asking for confirmation that an employee hasn’t been declared bankrupt or entered into a voluntary agreement with creditors as part of a fit and proper procedure, it may be more relevant to use a service which would check for this against the public statutory registers.
How can Amiqus help?
ICAS recognise that this is a difficult area and one where there is potentially a lot of administration as well as risk for members in practice. As part of Evolve, the ICAS support programme for practice, we have partnered with Amiqus as a potential solution provider.
As a government certified IDSP, Amiqus meet the levels of confidence required by the new digital schemes approved by the UK government. Their staff vetting services are designed to mitigate risk during the hiring process and provide ongoing support throughout the employee lifecycle.
Today, accountancy firms are in the midst of an unprecedented battle for talent and should, therefore, review their candidate onboarding experience with the same level of care as they do for their clients.
Many accountancy firms still onboard staff using static, lengthy, manual forms. This makes it difficult to monitor, review applications and collect documents from prospective employees which, in turn, makes it harder to identify and resolve red flags. This is where Amiqus can save you time and money by turning hours of paperwork into minutes of secure online compliance checks.
Furthermore, where a right to work check is conducted, it is essential to ensure that digital copies of all right to work check documentation are kept securely for the duration of the person’s employment and for a further two years once they cease employment with the organisation. Employers should also be able to produce this documentation quickly, in the event that they are requested, to demonstrate that a right to work check has been performed and in order to retain a statutory excuse.
Amiqus’ secure digital database can be filtered, searched and exported along with any previous document uploads to highlight the key information that you might need instantly.
If you’re interested in implementing an effective process for pre-employment and background screening with checks including Disclosure, employment history, credit reports and right-to-work verification contact support@amiqus.co and a member of their team will get back to you.
