New right to work checks for gig and self-employed workers

On 30 March, the Home Secretary Yvette Cooper confirmed plans to expand the scope of illegal working fines to cover businesses that fail to carry out right to work checks on self-employed contractors. It’s a significant development for employers because it would bring the gig economy and zero-hours work arrangements into the scope of immigration enforcement for the first time. We’ll speak to an immigration specialist about what this could mean in practice.

The timing of the announcement was no accident. It came just ahead of the UK’s first Organised Immigration Crime Summit, which brought together leaders from over 40 countries. Cooper framed the policy as part of a wider crackdown on people smuggling, saying that illegal working enables smugglers to sell the promise of jobs in the UK, exploiting vulnerable people along the way. She wants businesses to play their part in disrupting these networks by carrying out right to work checks on all workers, whether employed or self-employed.

Both Personnel Today and People Management have picked up on this and focused on the fines, warning employers that failure to check immigration status could lead to penalties of up to £60,000 per illegal worker. The article also pointed out that some companies like Deliveroo and Uber Eats are already doing these checks voluntarily. People Management, put the emphasis on compliance and HR responsibilities. It said the changes would mean new legal obligations for firms using casual labour, advising employers to review their systems and prepare for enforcement.

As things stand, right to work checks are only required where there is a contract of employment. That means businesses using self-employed workers aren’t currently liable if a contractor turns out to be working illegally. The announcement signal a major shift. If the changes go ahead, businesses would need to carry out checks on all individuals they engage, regardless of employment status, or risk heavy fines and even criminal penalties.

So, let’s hear more on this. Maria Gravelle is an immigration expert and earlier she joined me by video link from Edinburgh: 

Maria Gravelle: “Currently, the right to work guidance is only applicable to employees. So an organisation which has direct employees has a duty not to employ any illegal workers, and there are fines that are enforceable if they do and so the best way to protect your organisation against these fines is to conduct right to work checks against the people that you directly employ. There was some clarification put into the sponsor guidance and the right to work check guidance to clarify that if you are a licenced sponsor and you sponsor somebody who is not an employee, you nonetheless have a duty under the sponsor guidance to confirm that person's right to work by conducting a right to work check. So there is very limited scope at the moment whereby some organisations, i.e. those who have sponsor licence and who sponsor non-employees, they have an obligation to check the right to work status of non-employees but, other than that very sort of niche situation, the rule is that you would only check people who are your direct employees. Now, the sponsored guidance and the right to work guidance has long included this sort of line which says even though you don't have to check the right to work status of people who are not your employees - so if you've got contractors coming in to your workplace, for example - there's this recommendation in the right to work guidance that it's nonetheless good practice to do that. Now that's all very well and good, but it's actually very practically unfeasible for many organisations, particularly in areas like construction or office buildings, which, perhaps, engage an external cleaning company for cleaning services. It's quite impractical in these situations for the main organisation to conduct right to work checks on all of these people because they don't employ them directly and, in many cases, they don't really know an awful lot about them. So traditionally, what's happened is that commercial agreements between organisations have included some kind of safeguarding that the employing entity who the main organisation is contracting with, that they will conduct their right to work checks. So what has now been suggested by the Home Secretary is that that would be expanded and that there would be a risk of penalty, or risk of a fine or civil penalty, for an organisation who engages a worker, or a contractor, and if that worker or contractor were found to be an illegal worker then there could be some recourse by way of a penalty on the company that contracts them. So that is a very significant deviation from what the current guidance currently says.”

Joe Glavina: “Is there anything that HR professionals need to do in light of this announcement?” 

Maria Gravelle: “Well, until it comes into law there's not really any requirement to change what you're doing currently. The main thing to focus on right now is ensuring that you are complying with the current right to work guidance and that you have robust procedures for checking right to work for those people that you currently have to, so you're all of your direct employees, regardless of their nationality, and if you're a sponsor, all employees and workers that you currently sponsor. If you do engage a number of contractors, it's also about making sure that you are safeguarding yourself there too. So if you are engaging with, let's say, an agency or another organisation, making sure that the commercial agreements that you've got in place with them also provides that somebody somewhere down that chain is going to be checking the right to work status of workers because it is quite disruptive, even if it's not you who would be liable for the civil penalty, if somebody who's in your organisation and is perhaps quite an integral part of it is found to be an illegal worker. There's reputational risk, there's business disruption risk, and it just doesn't look very good from an external perspective, either. So yes, there definitely are reasons why you would want to make sure that people who are workers coming into your organisation do have the right to work and so making sure that that is being checked somewhere down the chain, and that you have a mechanism to get proof of that. That is certainly advisable at the moment.”

If you would like help with any of those practical steps Maria mentioned, ahead of this change coming in, please do contact Maria -her details are there on the screen for you. Alternatively, of course, you can contact your usual Pinsent Masons adviser.