UK companies could be hit with fines of up to £60,000 per worker under the proposed changes, which would require them to carry out right-to-work checks on freelancers and other casual workers, a move many business owners are not yet aware of.
Under current regulations, since 2008, employers have been legally required to carry out right-to-work checks on employees employed under traditional employment contracts. However, a government consultation ending on Wednesday December 10, part of the Border Security, Asylum and Immigration Bill, proposes extending these obligations to gig economy workers.
While the changes target sectors such as construction, food delivery and beauty services, legal experts warn that the scope could be much broader, potentially covering freelancers, contractors and temporary workers across many industries.
The proposals could impose a significant administrative burden on small businesses, particularly those that rely heavily on flexible or freelance workers. Zoe Williams, founder of supplement brand Aegle, said the changes were not on her radar. Williams, the only permanent employee at her company, which turned over £1m this year, relies on freelancers to run the business.
“I’ve never heard of that before,” she said. “Any additional administrative burden is always a big challenge for small businesses.”
In the consultation document, Immigration Minister Alex Norris said the measures were aimed at “reducing the ability of fraudulent employers to exploit illegal workers and encouraging companies to provide work opportunities to those permitted to work in the UK”.
Rob McKellar, legal services director at employment law specialist Peninsula, said immigration enforcement had become an increasingly important political issue. “The government wants to give the impression that it is doing everything in its power to combat illegal immigration,” he said.
The Home Office said last month it had arrested 171 delivery drivers working illegally in the UK and detained 60 for deportation as part of an enforcement action against the gig economy.
Companies could face severe penalties if they fail to comply with the proposed rules. As with existing right-to-work obligations, employers face civil penalties of up to £60,000 per illegal worker. In cases where a company is found to have knowingly employed someone without a work permit, criminal penalties can include unlimited fines and prison sentences of up to five years.
Audrey Elliott, partner at law firm Eversheds Sutherland, warned that the risks go beyond financial penalties. “There is also significant reputational risk, particularly for companies bidding for public sector contracts,” she said.
Elliott recommended companies carefully review their staffing arrangements and ensure robust processes are in place for everyone carrying out work, including freelancers and contract workers. Employers must not only verify work authorization status before beginning work, but also monitor visa expiration dates to ensure ongoing compliance.
Over time, Elliott said, some companies may decide to move away from freelance arrangements altogether. “More employers may choose traditional employment relationships to reduce compliance risk,” she said.
The government has not yet confirmed when the changes will come into effect, but legal experts believe they could not be implemented until 2027.
