For years, the ethos has always been:
“They’re self-employed. We’re not their employer, so their Right to Work isn’t our responsibility.”
Historically, there has been some truth to that.
The statutory Right to Work checking scheme has primarily applied where somebody is employed under a contract of employment, service or apprenticeship. The current Home Office guidance still says that where somebody is genuinely self-employed, the business engaging them is not normally required to establish the same statutory excuse that it would for an employee.
But that landscape is changing. The Government is extending the Right to Work scheme beyond traditional employment arrangements, closing a gap that has existed around self-employed workers, individual subcontractors and other casual working arrangements.
And for businesses that rely heavily on contractors, this is something I would be preparing for now.
Why is the law changing?
The way we work has changed enormously. Businesses increasingly use self-employed contractors, subcontractors, casual workers and agency staff. That is particularly common in industries such as construction, warehousing, courier services, food delivery and other sectors where labour needs can fluctuate. It makes commercial sense for businesses to operate like this.
The problem is that the immigration checking regime hasn’t kept pace. The Home Office itself identified that businesses using self-employed contractors often did not carry out pre-engagement Right to Work checks because, quite simply, they weren’t legally required to. This means the Government has moved to close that gap.
The extended scheme is intended to cover businesses engaging people through arrangements including individual subcontractors, casual and temporary workers and certain online matching services. The intention is also to extend the associated civil and criminal sanctions into these arrangements.
In other words, simply saying: “They’re self-employed” isn’t going to be the end of the conversation.
This is bigger than Right to Work
There is another reason I think businesses need to take notice.
If you’ve got a workforce made up of employees, workers, zero-hours staff, casual workers, freelancers and self-employed contractors, do you actually know who is working for you and on what basis?
Because putting “self-employed” at the top of a contract doesn’t automatically make somebody self-employed. (I know, doesn’t make sense, bear with me).
Employment status is determined by the reality of the relationship, not simply the label the business chooses to give it. Government guidance specifically warns businesses that they cannot simply decide someone is self-employed because that arrangement and label suits the business.
That means now is a very good time to audit your workforce.
- Who works for you?
- What is their employment status?
- Have you got a contract for them?
- Have you checked their Right to Work?
- When was it checked?
- Is their Right to Work permanent or time-limited?
If it is time-limited, who is responsible for making sure it is checked again? Most importantly, where is the evidence?
Because “I’m sure somebody checked it when they started” isn’t a compliance system.
This is where HR systems are invaluable! If you’re still keeping employee information across paper files, spreadsheets, email inboxes and someone’s memory, the margin for error is getting smaller.
That’s exactly why I encourage small businesses to put a proper HR system in place before they think they’re big enough to need one. You don’t need a huge HR department or an expensive corporate system.
Cloud-based HR systems for small employers can start at around £25 a month.
For that, you can centralise your people records, contracts and documents and create a much clearer compliance trail. Depending on the system you choose, you can also use reminders and workflows to keep on top of things such as document expiry dates and follow-up Right to Work checks. You can even send blanket communications and staff will get them on their mobiles!
Let’s face it, £25-ish a month is a relatively small investment compared with trying to reconstruct your records when somebody asks:
“Can you show me the evidence that this person had the Right to Work?”
Don’t wait until somebody asks for the file, and be real: that £300 a year the system costs you is going to be small fry compared to a fine, because these will be imposed.
Good HR is about putting the infrastructure in place so that the business can demonstrate what it did, when it did it and why. The expansion of Right to Work responsibilities is another example of why businesses need to move away from:
“They’re not an employee, so it doesn’t matter.”
The direction of travel is very clear: businesses using flexible labour arrangements are going to have greater responsibility for knowing who is actually carrying out work for them and whether they are legally entitled to do it.
So if you use self-employed contractors, subcontractors, casual workers or other flexible labour, now is the time to review your processes.
And if your HR system is currently a spreadsheet, a filing cabinet and somebody saying “I think we’ve got that somewhere”, now might also be the time to change that.
ECL People Solutions helps small businesses put practical HR systems, contracts and compliance processes in place without the cost of an internal HR department.
If you’re not sure whether your current processes would stand up to scrutiny, get in touch.
