Expected Impact on Businesses
The Act introduces a stricter enforcement model designed to target modern labour structures. Businesses should expect:
- A wider obligation to conduct right to work checks beyond traditional employees.
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Introduction of New Home Office checking processes, requiring updated internal procedures.
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Increased civil penalty exposure, now up to £60,000 per illegal worker.
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Greater sponsor compliance risks, including potential licence revocation.
- Greater likelihood of additional sanctions such as:
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Director disqualification
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Alcohol licence revocation
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Temporary business closure
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Illegal working compliance orders
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Heightened reputational risk, particularly for regulated or consumer-facing organisations.
Proposal 1: Expansion of Relationships Covered by the Illegal Working Regime
The updated framework covers a broader range of working relationships, including:
New categories within scope
- Non-employees or apprentices engaged under a worker’s contract.
- Sub-contractors engaged by a business.
- Individuals engaged via fee-charging online job-matching platforms connecting service providers with clients/customers.
Additional Home Office intentions:
- Bring gig economy workers, including casual workers and zero-hours workers within scope.
- Extend liability to businesses benefiting from agency workers, even if they do not engage them directly.
- Reduce opportunities for illegal workers to exploit modern labour supply chains.
- Taking insecure, exploitative labour conditions and work environments, and potential tax evasion involving illegal workers.
Proposal 2: Extension of Liability for Illegal Working Civil Penalties
Under the new rules, liability may arise even where a business has no direct contractual relationship with the individual.
Liability will arise even when:
- The business has no contractual relationship with the individual.
- The business is unaware the individual is providing work or services.
Scenarios where liability may apply
- A business employs a worker who delegates work to another individual.
- A business contracts to provide services and engages another party to deliver part or all of them (e.g., contractors with substitutes, agency worker arrangements).
- An online matching service connects a service provider to a customer, who then contracts directly with that individual.
Key clarifications from the draft provisions
- Liability can apply at any point in a chain of contracts (e.g., construction supply chains).
- Multiple businesses may be jointly liable for the same instance of illegal working.
Recommended Actions for Businesses
To prepare for implementation, businesses should:
- Review current right to work processes and document-keeping practices, internally or with an immigration adviser.
- Seek legal advice immediately if illegal working concerns or process weaknesses are identified.
- Conduct an impact assessment of the proposed changes, including resource and budget implications.
- Engage in consultations, especially relevant for businesses reliant on contractors, casual labour, gig workers, or agency workers.
- Monitor updated Home Office guidance as it is released.
- Develop and implement a compliance strategy aligned with the expanded regime.
- Train HR team and those responsible for right to work checks and sponsor compliance, on new requirements and revised operational procedures.
We will continue to provide updates from the Home Office and advise of any proposed changes to the Right to Work Guidance.