From April, companies will have to pay for digital ID verification.

As the government privatizes digital ID verification, businesses may pay up to £70 per employee to verify a new starter’s identification starting in April

The Home Office has announced that beginning April 6, firms would be required to employ authorized third-party software to authenticate digital identification.

According to Louisa Cole, a principal associate at Eversheds Sutherland, these ID checks are anticipated to cost anything between £1.50 and £70 per new employee, based on their study.

“This is a significant change for employers because the cost of purchasing and implementing this technology falls on them.” “For major organisations, onboarding a large number of individuals will add a significant expense to their budget,” she said.

This would function similarly to how businesses must license approved software to file their VAT returns through HMRC’s Making Tax Digital system. Many small firms have questioned how MTD benefits them other than increasing their administrative burden and expenditures.

Small firms onboarding new personnel used to do physical passport checks and visual verification of individuals before Covid-19. Remote working began to allow for virtual checks on March 30, 2020, with new employees merely holding their passports to their home computer screen.

Despite the new plan going live in less than three months, the ID-checking software vendors have yet to be certified.

On the other hand, employers can face fines of up to £20,000 per new employee if they knowingly hire illegal workers who use fake or borrowed IDs that could have been detected if the company had conducted government-mandated background checks.

The Association of Professional Staffing Companies (APSCo) has requested that the Home Office clarify standardized rates or charge limitations to protect small business recruiters.

“We are concerned that SME staffing firms will be exposed to excessive costs given that the choice regarding certified provider usages is generally dictated by the end-outsourced user’s provider,” Tania Bowers, global public policy director at APSCo, said. This is an additional supply cost, resulting in higher expenses for end-users or lower rates for workers, disincentivizing the finest talent from applying for jobs.

“We have requested that the Home Office impose modest standard rates or fee restrictions, as well as other appropriate limitations, on authorised providers of Identification Document Validation Technology to prevent staffing firms from being financially damaged needlessly.”

There was also the possibility of unnecessary check duplication, according to Ms. Bowers.