New Home Office fraud legislation exposes employers to risks

ceo fraud

Under proposals, businesses will need to demonstrate reasonable measures have been implemented to prevent fraud

The latest action from the Home Office to prevent fraud in the workplace will place even greater emphasis on compliance for employers, and is another example of the growing clampdown on business-related criminal offences that firms need to be prepared for.

That’s according to specialist background screening and identity services firm, Sterling.

In an announcement last week, the Home Office unveiled new proposed legislation for “failure to prevent fraud” offences, which would make it easier to prosecute larger firms if members of staff commit fraud to benefit their business.

Under the proposals, the employer would need to demonstrate that reasonable measures were in place to deter the offence.

According to Steve Smith, President of International at Sterling, this latest development is another example of the increasingly complex compliance landscape that employers need to be prepared to navigate:

“The growth of technology has inadvertently led to an increasingly sophisticated fraud. With remote working also presenting further challenges to employers when it comes to preventing fraud and other unscrupulous behaviour from staff, businesses are facing a wealth of hurdles that could pose a real risk to their company. However, with the Home Office demonstrating a clear focus on clamping down on unlawful activity and putting the onus on organisations to ensure they are taking steps to reduce fraudulent behaviour, employers really do need to take action now.

“While we may be in a highly flexible world of work that many wouldn’t have even dreamt of pre-Covid, this way of operating does create more opportunities for fraud and is arguably more difficult to control and monitor. We’ve seen an increase in workers managing multiple full-time jobs through fraudulent work activity, including outsourcing day-to-day tasks to friends or relatives. And that’s just one example of the behaviours that are being targeted by the Home Office and other global authorities.

“Business leaders needs to ensure they are set up to both effectively screen for any potential behavioural red flags before employment contracts are signed, and have a process in place to monitor this on an on-going basis if they are to avoid possible claims of failing to prevent fraud under these new proposals.”