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On 30 March 2025, one day before the UK’s landmark Organised Immigration Crime (OIC) summit, Yvette Cooper MP announced a number of proposed measures to crack down on illegal working, with a particular focus on the gig Economy, due to its flexible and often less regulated nature of work. The planned changes will require businesses hiring in the gig economy to complete right to work checks on all individuals, including workers, contractors and those on zero-hours contracts.
The rise of the gig economy
The gig economy has exploded in recent years, with millions of individuals now working as freelancers, contractors, or on short-term contracts across the UK. While this model offers flexibility for both workers and employers, the informal nature of the arrangement could present a breeding zone for illegal activity and exploitation, putting both the business and workers at risk.
Sectors such as food delivery, ridesharing, and construction are big recruiters in the gig economy and have not previously been legally required to conduct right to work checks on their workers. Some of the biggest players in the sector, such as Deliveroo, Uber Eats and Just Eat claim they undertake voluntary checks on their riders, to ensure their eligibility to work in the UK.
The current legal position
Currently, the Home Office guidance “Employer’s guide to right to work checks: 12 February 2025” (the Employer’s Guidance) refers only to requiring the relevant checks to be completed on ’employees’, interpreted by section 25 of the Immigration, Asylum and Nationality Act 2006 to be individuals:
- Over the age of 16; and
- Employed under a contract of service or apprenticeship.
Accordingly, businesses are not legally required to undertake right to work checks on any individual they use (or supply), that holds a lesser status than employee.
However, it is clear from the Employer’s Guidance that, whilst it is not a legal requirement, there are compelling reasons why such checks should be completed across the board, regardless of the individual’s employment status.
From an employment law perspective, the possibility of an ‘implied’ employment status trumping the contractual position has caused employers and employment lawyers alike sleepless nights for quite some time. This is a technical area which enjoys its fair share of litigation, demonstrating that an individual’s true employment status is not always clear cut.
The proposed legal position
There is a clear direction of travel for the government and that is to curb illegal employment rates. Based on the information available, this will mean employers will be required to undertake right to work checks on specific categories of workers and contractors. Where businesses fail to carry out these checks, they will face exposure to the hefty penalties already in place for those hiring illegal workers in typical roles, including fines of up to £60,000 per worker, business closures, director disqualifications and potential prison sentences of up to 5 years.
However, there remain unanswered questions – primarily, exactly which status types will be defined as ‘gig workers’ and therefore be subject to illegal working regulation?
Time to get ahead of the curve
As a team, we always advise our clients to err on the side of caution and undertake checks on all individuals engaged by the business, regardless of their employment status, given the potential sanctions for non-compliance are so severe.
At present, the government has not confirmed the commencement date of these changes, nor whether they will apply retrospectively. Nevertheless, employers are strongly urged to take the appropriate steps now and invest in educating key staff, such as its HR teams and line managers, about the upcoming changes to legal obligations in respect of gig workers and the prevention of illegal working.
If you are a business with a large gig economy workforce, and would like to speak with us about the upcoming changes, please do get in touch with Nicole Hambleton and Lynsey Blyth.
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