Right to work changes now in force – what employers need to do now

Significant changes to the UK's right to work regime came into force on 1 October 2026, expanding the scope of illegal working compliance for all businesses and exposing organisations to penalties of up to £60,000 per illegal worker, alongside potential reputational damage and sponsor licence suspension or revocation. The changes arise from section 48 of the Border Security, Asylum and Immigration Act 2025 and represent one of the most significant expansions of the right to work ("RTW") regime since its introduction.

Whilst right to work checks have traditionally been viewed as an HR and recruitment issue, the new rules have much wider implications through the workforce and supply chain. Businesses must now consider and address illegal working risks arising within their supply chains, contractual arrangements and workforce models, meaning that HR, procurement, commercial, legal and operational teams all have a role to play.

Expansion of scope

The first headline change is that the duty to check an individual's right to work in the UK is no longer confined to traditional contracts of employment.

Historically, the RTW regime applied primarily to employees and apprentices. However, from 1 October 2026, the regime has been expanded to include a much wider range of working arrangements, reflecting the way many businesses now engage labour. Right to work checks must now be completed on individuals engaged under a worker's contract (for instance zero hours or casual workers), individual subcontractors and certain online matching arrangements where individuals are connected with clients or customers through digital platforms.

Clarifications in the RTW guidance confirm that agency staff supplied as temporary workers to an end-client are in scope for right to work checks. The agency has a legal obligation to carry out those RTW checks and would be liable for a civil penalty if the individuals were working illegally. In contrast, most self-employed contractors or those engaged to provide services through a personal service company would not be in scope for a right to work check where it is a business-to-business relationship. However, the guidance states that each working arrangement should be checked based on the individual facts and how it operates in practice.

The practical effect is that businesses can no longer assume RTW compliance only applies to their directly employed workforce. Organisations that utilise contingent labour, flexible workforce arrangements, subcontracting models or platform-based service delivery should address the new rules promptly and put in place the additional compliance processes to meet the new obligations and prevent liability being held against them for any illegal working.

Extended liability

The second and arguably most significant change is the introduction of the new "extended liability" regime.

Previously, liability for illegal working sat largely with the organisation that directly employed or engaged the individual concerned. Under the new framework, liability may in certain circumstances extend further up a contractual chain, even where the organisation does not have a direct contractual relationship with the individual carrying out the work. This means that organisations may face liability for illegal working occurring elsewhere within their labour supply chain if the required compliance measures are not in place.

This is intended to reflect modern labour supply models, where work is often delivered through multiple organisations, subcontracting arrangements and intermediary businesses rather than through a straightforward employment relationship. Therefore, these changes are particularly relevant for businesses operating complex labour supply chains, outsourcing arrangements and contractor engagement models.

The extended liability provisions may apply in three different scenarios:

1. Supply chains:

The extended liability regime can apply where work or services are passed down through a chain of contracts and labour is ultimately supplied by another organisation within that chain. In those circumstances, businesses will need to demonstrate that appropriate RTW compliance measures have been embedded throughout the contractual framework.

In practice, the legislation does not simply require businesses to include new wording in their contracts to avoid liability. To establish a statutory excuse against extended liability, organisations must be able to demonstrate that both appropriate contractual protections and practical ongoing compliance measures are in existence throughout the arrangement. Importantly, this is not simply a contractual drafting exercise but an ongoing audit exercise to ensure compliance is being met down the supply chain.

2. Individual contractor arrangements where the contract permits a substitute:

Employers that engage self-employed consultants or contractors either directly or through a personal service company should also review their existing arrangements. Although the consultant or contractor would generally fall outside the scope of the RTW changes, particular care is needed where contracts contain substitution rights or where services are delivered through intermediary arrangements. Organisations should therefore review their contractor population and understand how those arrangements operate in practice rather than relying solely on contractual labels.

Whilst genuine business-to-business arrangements are generally treated differently to worker or employment relationships, the new regime recognises that contractor models can sometimes involve substitution rights or other labour supply arrangements that create RTW risks further down the chain.

The key point for businesses is that where contractor agreements allow an individual to send a substitute or arrange for another person to perform the services, RTW checks must be completed by the individual contractor on the substitute. In those circumstances, organisations should ensure that appropriate RTW contractual provisions are in place and are supported by practical compliance processes, including auditing and checking the contractors' identity verification measures.

3. Online matching services

Where an online matching service matches a service provider with a client or customer to provide work or services, and the service provider enters into a contract with the client or customer, the online matching service will be caught under the new extended liability regime, even though the platform is not the direct employer. In practice, the new legislation will require the platform to check RTW as part of their onboarding process and demonstrate their terms and conditions meet the RTW compliance measures and robust identity verification is implemented.

To establish a statutory excuse to extended liability, businesses must be able to demonstrate the following:

• Specific contractual terms and conditions are included in the commercial agreement. These should expressly enforce that RTW checks are conducted on workers engaged under the contracts and any substitutes, placing restrictions on subcontracting, permitting compliance audits, allowing for enforcement action in the event of failure to comply (which could include termination of the contract) and requiring compliance with Home Office investigations.
• Substitution controls must be implemented before work commences, to ensure that any substitute is identified and authorised, where applicable.
• Practical identity verification systems and processes must be implemented to ensure that the individual carrying out the work is the same person on whom the right to work check was conducted. Businesses should therefore consider whether their existing onboarding and verification processes are sufficient to identify substitution or impersonation risks and ensure their processes are verified as compliant up the supply chain.

As a result, responsibility for these changes extends well beyond HR and recruitment teams and into the wider business, including commercial, procurement, legal and governance functions.

When do these provisions bite?

The Home Office has been clear that the expanded regime applies to relevant engagements and contractual arrangements entered into on or after 1 October 2026.

However, businesses should not assume that pre-existing arrangements can simply be ignored. There remain areas where contractual renewals, extensions, variations and new statements of work could bring an existing arrangement within scope of the updated framework. The position may not always be straightforward, and organisations should carefully assess ongoing contractual relationships as part of their wider compliance review. Particular attention should be given to long-term outsourcing arrangements, framework agreements and contractor engagements that may be subject to renewal or variation.

Practical steps for employers

Employers should have now mapped their workforce and labour supply arrangements to know which arrangements may fall within the expanded scope of the RTW regime. In light of this information, businesses should be actively enforcing the following steps:

• ensuring that their onboarding and RTW processes and systems for these wider checks are compliant and in place;
• reviewing contractual supplier documentation to ensure it contains appropriate RTW compliance provisions and reporting mechanisms;
• considering what identity verification systems are in place down the supply chain and whether they are adequate;
• ensuring responsibility for RTW compliance is understood across HR, procurement, legal and operational teams; and
• keeping a paper trail showing the checks, contractual protections and ongoing audit compliance steps taken, in case an illegal worker is found.

How can Foot Anstey help?

Our immigration team is already supporting clients with reviewing commercial agreements, assessing labour supply arrangements and updating RTW compliance processes in light of the 1 October 2026 changes.

If your business uses subcontractors, outsourced service providers, agency workers, consultants, online matching services or other types of flexible workforce models, we can help you understand whether the new regime applies to your arrangements and identify any contractual or operational changes that may be required. We can also support with updating commercial documentation and carrying out targeted RTW compliance audits to help ensure your business is prepared for the expanded regime. Please do get in touch if you have any questions or would like any support tackling these new changes.