On 30 March the Home Office announced a further crackdown on illegal working and businesses hiring in the gig economy.

New right to work checks mean that companies hiring people in the gig economy would now be legally required to carry out checks confirming that anyone working in their name is eligible to work in the UK, bringing them in line with other employers, said the Home Office.

For the very first time, the Home Office stated, employment checks would be extended to cover businesses hiring gig economy and zero-hours workers in sectors such as construction, food delivery, beauty salons and courier services.

In its statement, the Home Office praised Deliveroo, Just Eat and Uber Eats, because these firms already voluntarily carried out checks to ensure their workers are eligible to work.

Home secretary Yvette Cooper said: “Under our Plan for Change, we are restoring order to the asylum and immigration system by introducing tougher laws and bolstering enforcement action to tackle illegal working and stopping rogue employers in their tracks.

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“Turning a blind eye to illegal working plays into the hands of callous people smugglers trying to sell spaces on flimsy, overcrowded boats with the promise of work and a life in the UK.”

The compulsory checks will confirm an individual’s immigration status and their right to work in the UK. If businesses fail to comply, they could be faced with fines of up to £60,000 per worker, business closures, director disqualifications and potential prison sentences of up to five years.

Chetal Patel, head of immigration at Bates Wells, said the impact of the employment checks on the gig economy “should not be underestimated” and that businesses needed to have robust systems in place to conduct the checks.

“The wider reputational risk of illegal working is just one aspect; on the other hand, you have potential civil penalties of up to £60,000 per illegal worker,” said Patel.

Hannah Wright, senior associate in the employment team at Bates Wells, added that the expansion of right to work tests would mitigate the risk of modern slavery.

Wright said: “From the Home Office announcement, it is clearly anticipated that gig economy platforms will utilise digital ID verification technology to support the process of right to work checks. However, these systems must be implemented in a manner which is fair, transparent, and free from unlawful discrimination.

“Gig economy platforms using these systems will need to prioritise transparency, accountability and openness, ensuring that workers understand what the checks are used for, how decisions are taken, and are provided with a clear and effective route to challenge the technology where there are concerns that it is not working.”

Further complications arose from the use of “substitution” clauses by gig economy platforms, Wright added. These were commonplace in the sector and often seen to be used to avoid creating an employment relationship (and as such, avoid basic employment entitlements and protections).

However, in practice, these clauses were often a fiction, she said. Aside from the unfairness this created, purporting to allow substitutes created a real vulnerability from an illegal working perspective, as businesses struggled to implement systems which might genuinely be able to facilitate substitutes but also effectively guard against the risks of illegal working. “This runs the risk of leaving their platforms open to manipulation and exploitative practices,” said Wright.

The new measures have come in alongside a ramp-up of operational action by Immigration Enforcement teams, who since July have carried out 6,784 illegal working visits to premises and made 4,779 arrests – an increase of 40% and 42% compared with the same period 12 months ago. In that time, 1,508 civil penalty notices have been issued.

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