Asking firms to put their business second to doing even more of the government’s job for it will only slow growth and boost unemployment – REC

The Recruitment and Employment Confederation (REC) is concerned that imminent plans to widen liability for Right-to-Work checks across labour supply chains will create needless legal burdens on employers.

Recruiters already check a worker’s legal Right to Work (RTW) before sending them out on assignment. But under a major change suggested by the government, liability for failing to do the right checks and therefore hiring illegal workers, will extend to employers using agency workers. This will require end hirers, main contractors, labour providers or platforms to put controls in place even if they are not the worker’s direct employer. This will mean end clients having to put in identity-verification processes, even if that check has already been done.

This will massively increase complexity – for example, how is someone on a construction site meant to do a check if they haven’t been trained to do one or don’t have access to the correct technology on site to do so? REC believes the impact may be felt most strongly in sectors that rely on complex labour supply chains and lower-paid work.

It is typical for employment businesses to carry out RTW checks in the same way as other direct employers as it is understood they are the employer and employment businesses are also under a statutory obligation to obtain confirmation of the identity of a worker before they supply the worker to a client. By extending civil liability beyond traditional employment relationships to a wider range of working arrangements, REC is concerned that on top of complicated Employment Rights Act legislation, the government is introducing yet more rules which could dampen the use of agency workers. On any given day there are around 1 million workers on a temporary assignment – that is a massive part of our labour market that drives productivity and economic growth.  

The REC also notes that plans to introduce voluntary digital identification may make this policy proposal unnecessary. Digital ID could significantly reduce opportunities for illegal working, by streamlining employment checking processes such as RTW, without imposing significant costs on employers.

Employers who hire workers who do not have RTW could face penalties of up to £45,000 per worker for a first breach and £60,000 for repeat breaches.

Shazia Ejaz, REC Director of Campaigns, said:

“It would be helpful if government departments were more joined up when assessing the impact on business of all the new regulations they are proposing. In a slow-chugging economy business can only cope with so much on additional operating costs and bureaucracy.

“Labour supply chains are longer and more complex than in previous times which will also make it harder to establish where the final liability for these checks sits. Instead, the Home Office should be collaborating with the Department for Science, Innovation and Technology (DSIT) to get Digital ID up and running which will significantly reduce the opportunity for illegal working.  

“It is reasonable to ask employers to check legality. But this goes way further and businesses should not face liability for workers they do not employ when they have taken reasonable steps to ensure compliant suppliers are carrying out Right to Work checks. The likely result is slower onboarding and a more cautious hiring process at a time when employers need access to talent quickly and young people need jobs.

“Worryingly, although the proposed code of practice says employers must avoid discrimination, heavy penalties may encourage some businesses to favour applicants whose right to work is easiest to verify, such as British or Irish passport holders – instead of the best talent available to them.”

Notes to editors

1)    These are proposals in a draft code due to come into force from October 2026.