New laws to be introduced to “clamp down” on illegal working

On 30 March 2025, the Secretary of State for the Home Department (Yvette Cooper) announced that, “companies hiring people in the gig economy will now be legally required to carry out checks confirming that anyone working in their name is eligible to work in the UK“.

Since September 2024, companies holding a Home Office sponsor licence have had a positive obligation to conduct right to work checks on workers who are not direct employees where they are sponsored to work in the UK under a sponsor licence. Typically, this would extend the requirement to undertake checks to self-employed individuals who, in order to meet the requirements of sponsorship, would be working in a highly skilled and highly paid role. The Home Office also updated its right to work guidance last year to clarify that there were “compelling reasons” for checks to be carried out on workers who are not direct employees, such as avoiding business disruption and reputational damage caused by illegal workers. The updated guidance also confirmed that employers were “strongly encouraged” to verify right to work for contractors, and to ensure that agencies providing labour were conducing compliant checks on the labour they were supplying. The guidance specified that this included anyone in the supply chain using a substitute to perform work on their behalf. However, the March 2025 announcement goes much further than this and confirms that the requirement to conduct these checks will be extended to all companies operating in the gig economy, and to zero-hours workers.

These changes are likely to have a particular impact on companies working in the hospitality, construction and logistics sectors, given the often-heavy reliance on casual workers and contractors.

The law on preventing illegal working is set out in the Immigration, Asylum and Nationality Act 2006, and this legislation will need to be amended before the changes can come into effect given that the relevant provisions at Section 21 currently state “a person commits an offence if he employs another (“the employee“) knowing that the employee is disqualified from employment by reason of the employee’s immigration status”. Whilst arguments about the worker status of those engaged in the gig economy have been rumbling on for some time, gig economy workers are not typically classed as employees, but rather as ‘independent contractors’ or ‘workers’. Both of these statuses attract a different set of legal protections than those enjoyed by ’employees’.

Under the proposals, civil illegal working penalties and other sanctions (such as temporary business closures) currently applicable where illegal working is found to have occurred will be extended to gig economy workers and workers on zero hours contracts.

How right to work checks must be conducted

In order to establish a statutory excuse (defence) to civil illegal working penalties, companies must conduct their right to work checks in line with the requirements set out in the Home Office’s Employer’s Guide to Right to Work Checks (“RTW Guidance”).

How the check must be conducted will depend largely on whether the individual is a British / Irish national or is subject to immigration control, and what type of evidence they hold of their nationality / immigration status.

British / Irish nationals

1. Manual checks on physical documents: Employers are required to review an original document (confirmed as acceptable evidence in the Home Office’s RTW Guidance).
2. Identity Service Provider checks: If the individual holds a valid British or Irish passport, a third-party Identity Service Provider can carry out a check of the document, using identification document validation technology. No other checks conducted by a third party will be sufficient for the employer to gain a statutory excuse to civil penalties

Individuals subject to immigration control

1. Home Office online (share code) checks: Individuals can obtain a Home Office share code, which can be used by the employer to conduct a check through the Home Office’s online service.
2. Employer Checking Service (“ECS”): where an individual has an outstanding application, administrative review or appeal and their digital profile is not yet enabled to evidence this, or if their immigration status requires verification by the Home Office, a check must be run through the ECS.

Logistical challenges

Although the process for conducting a right to work check is relatively straightforward and quick, regardless of which of the above options is used, the employer is required to carry out its own identity verification checks to ensure that the person presenting themselves for work is the same person to whom the right to work evidence belongs. This can be done in person, or via video call. If this step is not completed, the company will not have a statutory excuse to civil penalties.

This step in particular is likely to pose logistical issues for companies with high worker turnover and a requirement to carry out checks at scale, and for those that have workers who work irregular hours as is typical in the gig economy.

Further guidance required

The March 2025 announcement provides confirmation that the requirement to conduct right to work checks will be extended to gig economy and zero-hours workers, however, further clarity will be needed on a number of points, such as:

• Will checks need to be carried out on all types of workers, such as non-sponsored genuinely self-employed workers and agency workers, as well as to gig economy workers and those on zero hours contracts?
• Will checks need to be carried out following one of the permitted methods from the Home Office’s right to work guidance as it summarised above, as is the case for employees, or will a more relaxed process (e.g. one which permits checks on all individuals to be outsourced, regardless of nationality, or which doesn’t require identity verification by the company) be acceptable?
• Where casual workers have a right to send a substitute in their place, will that right need to be fettered so that only substitutes who pass a right to work check are permitted? If so, will this have any impact on the ongoing considerations of ‘worker’ status?
• When will these changes come into effect (in particular noting that changes to the underlying legislation will be required)?
• Will the requirement for right to work checks on broader categories of workers apply retrospectively to existing workers, or be confined to new hires after a particular date?

The extension of the right to work check scheme to individuals who are not direct employees is one of a number of steps the UK government is taking to crack down on illegal working. An additional £5 million has been allocated to Immigration Enforcement teams in order to assist with prosecutions of business hiring illegal workers; and operational action has been ramped up significantly (since July 2024, 4,779 arrests have been made which is an increase of 42% compared to the same 12-month period the previous year).

It is important that employers and companies who engage non-employees keep up-to-date with developments, and ensure that appropriate right to work check processes are put in place, and that the people responsible for conducting these checks have adequate training to ensure they understand their responsibilities.

How we can help

Organisations which are likely to be impacted by these changes are encouraged to assess the likely impact and consider whether the processes they currently adopt to verify right to work for their employees will easily translate to the wider workforce. This is also a good opportunity to undertake internal right to work audits, ensure right to work check policies are up-to-date (or implemented where none exist), and train staff on the new requirements. Our Business Immigration team is happy to assist with these steps.

We will also continue to provide updates as further clarity is provided by the UK government.