Right to Work Checks: New rules, wider liability and increased risk

From 1 October 2026 the requirement to check right to work is expanding significantly and so is the exposure to financial penalties for illegal working. In this article, Flora Mewies and Laura Darnley look at what is changing and what business need to do.

What is changing?

The Border Security, Asylum and Immigration Act 2025 includes provisions to widen the right to work regime beyond employees and bring contractors, self-employed and gig economy arrangements into scope. We now know that these provisions will come into force on 1 October 2026. In the past weeks we have seen draft guidance giving insight into the new obligations imposed on all businesses.

This change is intended to modernise right to work compliance and bring it in line with modern ways of working, capturing the growing use of agency workers, contractors, subcontractors and gig economy arrangements.

The updated draft Code of Practice on Preventing Illegal Working: Right to Work Scheme has been laid before Parliament and is due to come into force on 1 October 2026. The Home Office has also published an updated draft of the Employer’s Guide to Right to Work Checks which, helpfully, sets out further detail and worked examples about how the new rules are expected to operate in practice.

As it stands, the Code extends the definition of employer/employee (for right to work check purposes only) to capture the engagement by a business of:

• Workers
• Contractors
• Subcontractors
• Agency workers
• Workers supplied via third parties
• Individuals engaged via intermediaries or labour providers
• Individuals matched to work through third-party arrangements (e.g. platforms or introducers)

The new rules will not apply to self-employed individuals in business on their own account who contract with clients or customers to provide goods or services. The example given is a self-employed plumber who provides their services directly to the public; right to work checks would not be required.

Whilst this is a clear-cut example, there are likely to be many arrangements falling into grey areas where it is unclear whether or not right to work checks are required.

Extended liability

The Government’s primary position is that responsibility for carrying out the right to work check will generally sit with the party directly engaging the worker.

As is currently the case, carrying out a compliant right to work check will give the business a ‘statutory excuse’ i.e. protection from a civil penalty where someone they directly engage is working illegally.

In some cases however liability for civil penalties from illegal working may sit elsewhere in the supply chain, rather than with the business that has the direct contractual relationship with the worker. The Government refers to this as “Extended Liability”.

This applies no matter how many levels of sub-contracting apply within the chain; it is not limited to first tier sub-contracting.

An example of this is given in the Guidance. In this case, a property developer engages other businesses to provide workers to build houses as part of a new development. If there is any illegal working by the individuals on site such as the bricklayers, electricians or plumbers, the property developer could be liable – even though the developer has not directly contracted with them.

To obtain a defence to illegal working where a business is not the direct “employer”, they will need to:

• Have a written contract in place before the work or service commences, which includes prescribed terms and conditions as stipulated by the Home Office;
• Establish substitution controls as per the requirements set down by the Home Office; and
• Have proportionate systems and processes in place to carry out identity checks on those carrying out the work.

Businesses will no doubt want to put these requirements in place in all situations where extended liability may apply. For many businesses, they will want to put these controls in place as a matter of course across all of their commercial contracts where work or services are being provided to mitigate any potential legal risks.

What do businesses need to do?

• In the first instance, businesses need to understand what contractual arrangements they have in place with staff and service providers to understand the impact of these changes. They will need to assess and determine:
  • Which workers they are obliged to check directly.
  • Where the extended liability provisions might apply.
  • What level of risk they are comfortable with when relying on checks undertaken by other businesses in the supply chain.
• Next, contractual documents will need to be reviewed and amended in line with the new requirements. This is essential to give businesses an opportunity to dispute liability if illegal working is found to have occurred within the supply chain.
• For most businesses this will require template documents to be amended
• For some this may require extensive stakeholder involvement from internal teams including legal, HR, procurement and commercial operations
• Although the provisions will not have retrospective effect, the scale of this task should not be underestimated. There are likely to be historic overarching contracts that may need amending and/or contracts being negotiated now that will need to be amended in advance of the October changes.
• Where right to work checks are conducted by a Digital Verification Service Provider (DVSP) (previously referred to as an IDSP (Identity Verification Service Provider)) the identity of the DVSP and their processes will need to be reviewed.
• Onboarding processes and right to work check policies and procedures will need to be updated and appropriate resource allocated for the extended checks required.
• New due diligence and audit processes will need to be put in place when contracting with third parties.
• HR, Recruitment and Procurement teams should be trained on the expanded requirements.
• Businesses will need to consider the practicalities of compliance. For example, resourcing for increased numbers of right to work checks, and how evidence of compliance will be retained.

These changes will have a significant impact on all businesses, regardless of their size. Those registered with the Home Office as sponsor licence holders will be well aware of the increasing scrutiny and compliance obligations placed upon them and the need to plan ahead.

Webinar: The expansion of UK right to work checks: How employers can prepare

Please join us for our webinar on 6 August 2026 at 10am here in which we will look at the changes and practical steps in more detail.

Register interest for our Right to Work Compliance Toolkit

You can also register interest for our Right to Work Compliance Toolkit below, designed to help businesses meet their newly expanded duty to present illegal working.

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