'Right to Work' checks are extending to freelancers from October

New rules around "Right to Work" are coming into force in the UK in October, and it's going to affect freelancers too.

Employees in the UK current need to demonstrate they have the 'right to work' as employees, as part of the Home Office rules on immigration. When you're applying for a job, you might have already been asked to show a passport or visa to demonstrate you're legally entitled to work in the UK.

However, from October, these checks will be extended to also apply to the self-employed, under certain conditions.

Who additionally needs to show their Right to Work?

Under the new guidance from October, if you're contracted or sub-contracted to an organisation who is delivering work to a third-party (i.e. an end client), that middle-man (perhaps an agency) is required to confirm your right to work in the UK. It doesn't matter if you're a sole-trader or working via a limited company.

So for example, let's say "ACME Brand Inc" has hired "Funky Creative Agency" to design and build them a new website. Funky use freelancers, and contract you to do the design work. In this scenario, Funky would be required to check your right to work status in the UK.

Funky Creative Agency here would be potentially fined £45,000 for not doing checks, if it was found the subcontractor didn't have the right to work in the UK. That fine is per individual too, and increases to £60,000 if there are repeat offences.

If ACME Brand Inc decide to get rid of Funky Creative Agency, and use a hiring/talent platform, where the contract is with the platform, not the freelancer, again, the platform would also be required to do those checks.

But ACME Brand Inc isn't off the hook here either - if the middle-man's (the agency or platform) checks fail, even those ACME never hired the freelancer directly, they could still be liable.

Even if you’re a solo-freelancer, doing working for you own client, and you bring on support or another freelancer to work alongside you, means you may need to be doing a right to work check

If you were working directly with ACME Brand Inc, as a self-employed individual - the right to work check isn't necessarily required - it's the involvement of an intermediary or subcontracting aspect of the work which brings this group of workers into scope of the checks.

How this affects hirers.

If you're a business who leans heavily on bringing in freelancers on a regular basis to work on projects for your clients - this directly affects you. Right now, you're probably not doing any sort of Right to Work checks, and don't have a process in place, yet alone know how to do a check.

If you're a large company, that works with freelancers on a regular basis - it's likely you'll have a process in place already for your employees, so fairly easy to extend this to workers.

But if you're a small business, where freelancers are your primary talent model - this could be a potentially large change - whilst risking costly fines if you don't.

And the £60,000 fines are not based upon your size - you could be a one-person business hiring freelancers, or a 1000 person business - the penalties are the same.

If you're a client who works with businesses who use freelancers, you'll need to start asking for demonstration that they've checked their freelancers right to work - else you could be caught in the liability if they didn't do proper tests.

You can't just assume or fully outsource your compliance to a third-party platform or agency - you'll need to show due diligence too.

How this affects freelancers.

There's minimal direct impact here for freelancers - most of the risk and burden falls to hirers here. However, there are potential indirect impacts.

Firstly, this creates an additional hurdle and risks for hirers to working with freelancers, and currently there is limited clarity around both who falls in scope of the checks. Similarly to IR35, anything which is confusing can lead to people avoiding it entirely, or implementing it badly - which might mean some hirers are hestitant to hire ad-hoc freelancers for the odd job.

Secondly, sharing your passport and personal details with a wider number of businesses creates both an additional admin burden for you as a freelancer, but also sharing this confidential information with smaller firms who may not have secure or safe methods of storing your data, causes increased security risks.

Thirdly, these checks are not required for freelancers who are working from outside of the UK. So whilst this legislation is designed to protect the UK workforce, it could have unintended consequences of pushing hirers to hire internationally, where these rules are not in place.

And finally, if you’re hiring fellow freelancers, these rules apply to you too - and if you’re found to have hired someone what doesn’t have right to work, a £45k fine isn’t something most freelancers could afford to cover. If you’re collaborating with others, having a good process in place, along with potential insurance to cover you in any circumstances where the Home Office or your client come after you will be essential.

What does this mean more broadly?

This is a huge change for hirers, especially in the creative industry, for example the advertising and marketing industry is a major example of where agencies hire freelancers to deliver work for an end client - and will push hirers to put better processes in place. Perhaps positively, this encourages hirers to go direct to freelancers, rather than using agencies and platforms, and builds a stronger case to argue for direct relationships.

It also forces hirers to be more open about working with freelancers - who are often a hidden part of the workforce. Legally required transparency around who is working on your team might lead to more openness about organisations accepting that freelancers are core part of their team.

But if nothing else, it means that organisations who hire freelancers need to actively think about how they onboard and engage freelancers in a more meaningful way. Maybe this is a positive prompt for hirers to rethink and redesign how they're working sustainably with freelancers.