The Home Office recently announced the results of its latest crackdown on illegal working, with more than 8,000 arrests following 11,000 raids carried out by its enforcement teams between October 2024 and September 2025. This represents a significant year-on-year increase of 63% in arrests and 51% in enforcement visits.
The enforcement activity, conducted with £5 million of government investment, has especially targeted takeaways, fast food delivery, beauty salons and car washes. But employers across all sectors have been affected following a more targeted use of HMRC and other government data to identify illegal working and modern slavery.
The consultation: extending right to work checks
Against this backdrop of heightened enforcement, and the Home Office's belief that the current legal framework is insufficient to address illegal working across modern working arrangements, it launched a six-week consultation on 29 October 2025 on extending the Right to Work Scheme. The consultation closes on 10 December 2025.
Why the change?
The government has identified that developments in the modern labour market, with increased usage of agency workers and casual contract arrangements in the gig economy, have changed the working environment and introduced new risks of illegal working. The consultation is aimed at providing consistency across industries by closing a perceived loophole and setting a level playing field between traditional employers and 21st century working models and platforms.
What are the current rules?
Currently illegal working penalties only apply to individuals classified as 'employees' under traditional employment contracts and are only imposed where the employer has failed to perform a compliant right to work (RTW) check. This longstanding law means that employers who use casual workers, self-employed contractors or freelancers cannot be fined or face criminal penalties if they fail to carry out RTW checks and unknowingly – or even knowingly – hire or engage an illegal worker.
To address this, through the Border Security, Asylum and Immigration Bill 2025, the Home Office wants to regulate any business that arranges or facilitates work of any kind, not just employment.
However, it's incorrect to say that employers can ignore RTW checks for non-employees working for them. Firstly, Home Office employer guidance says there are 'compelling' reasons to perform checks on non-employees, including reputational damage, operational disruption and invalidation of insurance. Since a tightening of the rules in September 2024, employers are already 'strongly encouraged' to check that their contractors and labour providers carry out RTW checks on everyone they employ, engage or supply (or carry out these checks themselves). This includes anyone in the supply chain that uses a substitute to perform work on their behalf.
Secondly there's already potential liability for employers that hold a sponsor licence. Sponsors have a sponsorship duty now to conduct RTW checks and prevent illegal working. The sponsor guidance says that "where the worker is not your direct employee (for example, if they’re self-employed)…you must still ensure the relevant checks have been carried out (and retain suitable evidence) to comply with your record-keeping duties". Failure to conduct suitable RTW processes for all workers is a serious breach of sponsorship duty and could lead to licence suspension or revocation. That's especially relevant in the current immigration climate. Alongside record numbers of illegal working raids, the number of sponsor licence revocations more than doubled in the 12 months to June 2025 as part of the Home Office's crackdown on 'rogue employers'. A licence revocation will automatically cancel the visas of all sponsored workers with no right of appeal. This can cause devastating operational damage to a business and its staff.
How will the current rules be changing?
The proposed rule change will require RTW checks to be carried out for:
- Individuals engaged as casual or temporary workers – including contractors or freelancers – not just employees
- Individual subcontractors who provide services personally
- Online or digital matching services that connect service providers to potential clients or customers for payment – this would include food or groceries delivery apps, ride sharing apps and the provision of service providers through an online platform.
The consultation seeks views on how this change should be operationalised and enforced, as well as the simplification of processes to make it easier for employers to fulfil their responsibilities. Responses will inform the preparation of guidance and the statutory code of practice that supports the scheme.
However, the consultation contains little detail on the exact boundaries of liability and responsibility. This will depend on how future guidance defines terms like 'workers', 'subcontractors', and supply chain and online platform relationships. Even without this detail it's clear that the policy extension will impact all businesses, and especially those hiring in the gig economy and zero-hours workers in sectors such as construction, food delivery, beauty salons, courier services and warehousing who are already being targeted with increased raids.
Penalties for non-compliance
The civil and criminal sanctions that currently apply to illegal working by employees will be extended to these new categories of engagement. Based on current laws, businesses that fail to conduct these checks could face:
- fines of £45,000 per illegal worker (£60,000 for repeat offences)
- reputational damage
- revocation of licences to operate (including sponsor licence)
- imprisonment of management for up to five years (custodial sentences are rare and reserved for the most serious cases of 'knowingly' hiring illegal workers)
- closure of their business.
Looking ahead: Digital ID
The government has also announced plans to introduce mandatory digital ID to prove someone's RTW by the end of Parliament – so still several years away. Digital ID will, it is hoped, create a simpler, more consistent way for employers to check someone's RTW and make it harder for people to avoid checks or use forged documents as proof.
What can employers do now?
While the consultation is ongoing, final guidance has not yet been published, and there is no start date for these changes, now is a good time for employers who engage workers through non-traditional arrangements to:
Consider responding to the consultation: Businesses affected by these changes may wish to respond to the consultation to help shape the practical guidance that will support implementation.
Review current practices: Map all working relationships beyond standard employment contracts, including gig workers, contractors, and platform-based arrangements.
Assess compliance gaps: Conduct an audit to identify where RTW checks are not currently being conducted or compliant documents have not been retained. If you identify any issues that need addressing do take legal advice from our employment or commercial teams as to the risks.
Review contracts: Consider updating agreements with agencies, subcontractors and platforms to clarify responsibility for conducting checks. For example, if workers at your site are employed or engaged by an agency (so the RTW checks are the responsibility of the agency), your business as end user should ensure that the commercial contract:
- places the RTW obligations on the agency
- gives you the right to request RTW evidence on demand or to perform your own RTW checks on those workers
- gives you the right to end the contractual relationship if the agency does not comply with those duties
- indemnifies you against liability arising from checks that are not performed correctly.
Plan for implementation: Begin considering how existing onboarding processes might need to be adapted to accommodate broader checking requirements.
For further information or to discuss any of these issues and what steps you can take to prepare for the changes, please do contact us or your usual Taylor Wessing contact.
