Under the current law, in order to obtain a statutory defence against a civil penalty for illegal working, employers must carry out compliant right to work checks on prospective employees. Further right to work checks must be undertaken if the employee has time limited immigration permission.  Failure to do so can lead to a civil penalty of up to £60,000 if it later transpires that the individual does not have the right to work in the UK. 

At the moment the right to work checks and the civil penalty regime only applies to employees. However, the latest Home Office guidance encourages employers to check that their contractors and labour providers carry out right to work checks in accordance with the guidance on everyone they employ, engage or supply (or that the business carries out these checks itself).   

Proposed changes

The law is likely to change shortly though.  Earlier this year, the Home Office announced plans to extend the civil penalty regime to cover  people who are not employees, such as those working in the gig economy or on zero hours contracts, including in sectors such as construction, food delivery, beauty salons, courier services and warehousing. The Border Security, Asylum and Immigration Bill (the Bill) is currently going through parliament with wording seeking to cover this extension.

On 29 October 2025, the government issued a consultation seeking  views on how such a change should work in practice  and be enforced and how right to work processes could be simplified to make it easier for employers to fulfil their responsibilities. The consultation is here: Extending the Right to Work Scheme - GOV.UK

Assuming the Bill becomes law, the civil penalty and right to work regime would be extended to cover:  

• organisations  engaging workers under a worker’s contract;
• organisations engaging sub-contractors; and
• online matching services (who provide a fee-paying online service by which potential clients or customers can submit enquiries for the purpose of being matched with suitable service providers). 

However, subsequent wording in the Bill seems to expand the civil penalty regime even further as it  states that an organisation is to be treated as employing any individual who personally provides the work or services (or any part of the work or services), including where 

• the organisation is not in a contractual relationship with the individual, or
• the organisation does not know that the individual is providing the work or services (or part of the work or services). 

It further states that the rules will apply where the organisation is contracted to provide (or arrange for the provision of) the work or services regardless of whether that contract is the first or any other contract in a chain of contracts.

Although the relevant wording in the draft Bill is unclear in many places, this additional wording appears to substantially widen the scope of the civil penalty regime and suggests that any organisation in a chain of contracts for the provision of services (end users and those in the chain of supply including possibly even agencies and recruitment businesses) could be liable to a civil penalty of up to £60,000 per illegal worker. Not only is there this significant financial penalty, but employing or, in the future, engaging illegal workers can also lead to potential business closures, reputational damage, director disqualifications and, if a criminal offence has occurred, potential prison sentences of up to five years. Further, issuance of a civil penalty can have an impact on an organisation’s sponsor licence and in certain circumstances it can lead to revocation of the licence. 

Consultation 

The consultation asks a number of detailed questions, including:

• Do you agree that the Home Office should determine liability within a supply chain or where there is a chain of contracts for the provision of work or services, by focusing on the point of failure that has allowed illegal working to take place?
• Please share your views on how you ensure that individuals working in your supply chain or providing work or services in your name via another business have the right to work in the UK?

These questions appear to suggest that the Home Office intends this new regime to be very wide in ambit, but it is unclear what they mean by “point of failure” in this context. It suggests only one organisation may be liable, rather than each party in the chain being potentially liable. We don’t yet have any guidance about how this will work in practice, but it would not be practical or even possible in some cases for every organisation in the chain to be required to do the checks. The consultation description specifically states that it will “give businesses the opportunity to help shape the guidance and the statutory codes of practice”, so we would encourage employers to respond to the consultation. 

What can organisations do now to prepare for these changes?

1. We suggest that organisations carry out an audit of the types of staff in their business or providing services to their business to review the risks they may face from this extension.
2. Businesses should ensure that their current right to work checks in relation to employees are fully compliant and in accordance with the latest guidance on the Prevention of Illegal Working
3. Businesses should start to prepare to carry out right to work checks in relation to workers and consultants. In particular:
   1. If an organisation engages agency workers via an agency, the organisation could undertake a right to work check before any agency worker starts;
   2. If an organisation engages a contractor or consultant, whether via a personal service company or directly, the organisation could carry out a right to work check before the individual starts to provide services;
   3. If the business is an end user of services with no visibility of who is providing such services, perhaps out of hours cleaning (where there is a chain of contracts) then consider if the business can undertake right to work checks, particularly if personnel change regularly. Consider your commercial position, as below.
4. The extension of this regime gives rise to commercial risks which will need to be dealt with contractually between the parties. When negotiating or renegotiating contracts for the supply of services or consultancy agreements with personal service companies, businesses should ensure that they include indemnities to cover the risk of civil penalties so far as possible and pass on the risk contractually down the chain, often to the entity which directly engages the individual. The commercial agreement should also make it clear that right to work checks must be carried out and that there is a right under the agreement for the end user/client to undertake a spot check of such right to work checks.
5. We would encourage businesses to respond to this consultation to seek to influence how the legislation and guidance is framed. The consultation is open until 10 December 2025.