What Labour’s employment-status review could mean for construction

Labour will launch a major consultation on employment status before 2026 — a move that could significantly impact how the UK construction industry hires and manages its workforce.

Why construction is in the spotlight

Construction relies heavily on self-employment and subcontracting, with a large share of the workforce operating via CIS, agencies or payroll companies. Any shake-up to employment-status rules could directly affect how these workers are classified — and what rights they’re entitled to.

What the consultation is likely to explore

Labour plans to review the UK’s current categories (employee, worker, self-employed), focusing on issues like whether self-employed subcontractors are genuinely independent. It will also examine clauses often used in construction contracts, such as substitution clauses, which may not reflect real working practice.

What could change

• More site workers reclassified as “workers” or employees

• Increased rights (holiday pay, sick pay) for reclassified individuals

• More compliance, paperwork, and potential cost increases for contractors and agencies

• Pressure on the traditional subcontractor/self-employed model widely used under CIS

  
  

The bigger picture

This consultation follows ongoing scrutiny of umbrella companies, labour-supply chains, and “false self-employment.” Combined, these reforms could reshape how construction firms source and manage labour.

What construction businesses and tradespeople should do

Review current contracts, keep a close eye on the consultation, and be prepared for a shift toward tighter compliance and potentially more formal employment arrangements.

To avoid the issues mentioned above, please contact Mineral Payroll to discuss how we compliantly pay your sub-contractors.

Contact us on:

0330 052 5200

sales@mineralpayroll.co.uk