Right to work: Are recruitment agencies liable for contractors without legal status?

Adrian Marlowe

April 22, 2025

Government cracks down on illegal working: New right-to-work rules in 2025

The Home Office is ramping up efforts to tackle illegal working, and recruitment agencies might be next in line. Proposed changes to Right to Work (RTW) legislation could bring £45,000–£60,000 fines for illegal workers, even in agency and gig economy setups.

A recent review into compliance in non-standard employment (think temp workers and gig roles) shows good overall agency standards, but there are gaps. And where there are gaps, there are risks.

Who’s liable under the proposed Right to Work changes if no-one employs the worker?

Here’s the curveball: under current UK law, only employers can be held liable for hiring someone without the right to work. And many agency-supplied workers aren’t employed by anyone.

They might be:

Hired on a PAYE contract for services
Set up under PSCs (personal service companies)
Or operating as self-employed with no formal employer

That means, technically, no one is breaking the law. No employer, no fine. But don’t get too comfortable. This loophole is exactly what the new rules aim to fix.

What your agency should do about the propose Right to Work changes, now:

Even if you’re not “the employer,” you can’t afford to skip Right to Work checks. Most professional agencies already do them, but now’s the time to bulletproof your process.

Here’s how:

Always view original documents in person, or use certified digital methods.
Leverage ID service providers or Home Office share codes.
Review and update your terms with hirers and RPOs. Expect increased pressure around liability and indemnities.