The construction sector faces employment law and immigration challenges that are distinctive to the industry. A highly mobile workforce, extensive use of subcontractors and self-employed labour, project-based working patterns, and a significant reliance on overseas skills all create compliance pressures that generic employer advice rarely addresses adequately. Employment status: the construction sector’s biggest liability […]
The construction sector faces employment law and immigration challenges that are distinctive to the industry. A highly mobile workforce, extensive use of subcontractors and self-employed labour, project-based working patterns, and a significant reliance on overseas skills all create compliance pressures that generic employer advice rarely addresses adequately.
Employment status is one of the most significant and persistent sources of legal risk for construction businesses. The sector traditionally makes extensive use of self-employed individuals, but the legal test for self-employment is not met simply by calling someone a subcontractor or requiring them to invoice for their work.
The Fair Work Agency, which launched on 7 April 2026, has enforcement powers that are directly relevant to employment status failures in construction. HMRC’s IR35 rules continue to apply to medium and large construction businesses using personal service companies, with the liability sitting with the client business.
Construction was a significant focus of Home Office compliance and enforcement activity during 2025. The sector presents particular sponsorship and immigration compliance challenges:
Since March 2026, Home Office sponsor guidance has expanded and clarified sponsors’ right-to-work check obligations. Sponsors must carry out checks not only on sponsored workers who are direct employees, but also on certain sponsored workers engaged through other arrangements. The scope of checks for self-employed contractors and other non-traditional working arrangements remains an evolving area and employers should keep the latest guidance under review
The construction sector regularly involves TUPE situations when a facilities management or maintenance contract changes hands, or when a specialist subcontracting arrangement is restructured. TUPE is likely to apply whenever a service changes provider, even where no physical assets transfer.
Construction businesses that win contracts, lose contracts, or restructure their project delivery arrangements need to consider TUPE at the earliest possible stage. The most expensive TUPE mistakes are made by businesses that only discover TUPE applies after the transfer has already occurred.
From October 2026, employers will be directly liable for harassment of their employees by third parties including clients, site managers, and other contractors. In an industry where employees regularly work in environments controlled by others, this new obligation requires proactive action.
Construction employers should review their harassment policies to address third-party harassment explicitly, ensure site inductions cover behavioural standards, and put in place a clear process for reporting and responding to third-party incidents before October arrives.
At Davenport Solicitors, we advise construction businesses on employment law, immigration compliance, sponsor licence applications, and TUPE. Call us on 020 7903 6888 or email contact@davenportsolicitors.com
Disclaimer
The material contained on this website contains general information only and does not constitute legal or other professional advice and should not be relied upon as such. While every care has been taken in the preparation of the information on this site, readers are advised to seek specific advice in relation to any decision or course of action.
