Adequate KYC checks are imperative for the recruitment industry to verify the identity of candidates and clients. Without comprehensive procedures, businesses might be at risk from money laundering and bribery from clients, as well as the employment of illegal workers or unsuitable candidates.
The financial sector in particular is subject to stringent AML requirements; it is important to identify and adhere to any legislation that might affect the specific industry that you are recruiting for. This may include carrying out additional checks, keeping certain records, and putting procedures in place to protect the business against money laundering or incorrect employment choices.
Recruitment agencies are not subject to AML regulations but there could be crossover in recruitment for companies within business sectors that must comply. For instance, financial institutions have a duty to ensure that they can verify a client’s identity, that they understand the nature of the client’s business (and are satisfied that their source of funds is legitimate) and have assessed the money laundering risks associated with that client.
Employers have a responsibility to ensure that all hiring decisions are in the best interests of their business, or their clients business, to protect customers, staff members and the financial interests of all companies concerned. This includes ensuring that the candidate is adequately educated and experienced for the role. Placing an unskilled worker in a role could leave you at risk of legal action as a result of incompetency. Businesses must also ensure that all employees have a legal right to work in the UK, failure to carry out adequate checks and the subsequent hiring of an illegal immigrant can result in large fines.
All businesses will be affected by the coming GDPR, which will regulate how clients and candidates’ data is collected, managed and stored. This means that assessment and amendment to your current onboarding and KYC practices are even more necessary now to ensure compliance when GDPR comes into force in May.