Gig economy and agency staff to fall under illegal working rules

The government has confirmed that civil penalties for illegal working will soon extend beyond direct employees to cover sub-contractors, agency workers and individuals in the gig economy. The change is part of the Border Security, Immigration and Asylum Bill 2025, which is currently making its way through Parliament.

For many businesses, this marks a significant shift. Currently, the civil penalty scheme is focused mainly on direct employment relationships. From 2026, however, businesses may be held responsible if individuals working in their supply chain, via agencies or through digital platforms, do not have the correct right to work documentation.

What does this mean in practice?

If you engage staff through a recruitment agency, use contractors on short-term projects, or rely on gig-economy style arrangements, you could face penalties if proper checks are not carried out. These penalties are already steep - up to £60,000 per illegal worker - and they may soon apply even when you are not the direct employer. Even an innocent oversight, such as assuming an agency has done all the necessary checks, could put your business at risk of heavy fines and reputational damage.

How you can prepare

There are steps you can take now to strengthen your position:

• Review your supply chain and agency agreements. Make sure contracts clearly state who is responsible for carrying out right-to-work checks.
• Audit your current processes. If you use contractors or casual staff, check that you can demonstrate the same level of compliance as you would with direct employees.
• Train your managers. Anyone who onboards staff, even temporarily, should know what documents to request and how to verify them.

These changes highlight just how complex immigration compliance is becoming. The challenge is not only understanding the rules but applying them consistently across different types of working arrangements. A reliance on agencies or contractors is no longer a safeguard, and even businesses with solid HR processes can find gaps when legislation shifts.

Involving a specialist at the right stage can make a real difference. That might mean reviewing your contracts with agencies to ensure responsibility is clearly allocated, checking that your onboarding processes align with Home Office expectations, or running a targeted training session for managers. By taking a measured approach now, you can avoid the cost and disruption of trying to fix compliance issues later, and stay focused on running your business with confidence.

If your business relies on contractors, agencies or gig workers, now is the time to review your compliance. Our business immigration solicitors can help you put the right checks and contracts in place to protect your business and avoid costly penalties.