Expansion of UK Right to Work Rules, Part 1: Current Position and Changes from 1 October

The United Kingdom’s right to work regime will expand significantly on 1 October 2026, with draft Home Office guidance confirming that the duty to prevent illegal working will no longer be limited to traditional employer-employee relationships. The revised framework will potentially apply to a broader range of workers, individual subcontractors, online labour platforms and businesses operating through contractual supply chains.

It will also introduce a new form of “extended liability” under which a business may, in defined circumstances, face civil penalty exposure even where it does not have a direct contract with the individual carrying out the work.

This is the first in a three-part series examining the new framework and the practical steps businesses should take ahead of its implementation.

WHAT IS THE CURRENT POSITION?

Employers currently have a legal duty to prevent illegal working by carrying out a compliant right to work check before employing an individual. Where the check is conducted correctly and the required evidence is retained, the employer will have a statutory excuse against liability for a civil penalty if the individual is later found to be working illegally.

Civil penalties can reach £60,000 for each illegal worker. Wider consequences may include criminal liability in serious cases, business closure, director disqualification, reputational damage and action against a sponsor licence.

The current civil penalty framework principally focuses on individuals employed under contracts of employment, service or apprenticeship. While businesses may carry out checks on other categories of workers as a matter of risk management, those arrangements do not fall within the current statutory right to work scheme. Where a worker is not a direct employee, for example because they are genuinely self-employed, an employer is not currently required to establish a statutory excuse.

Sponsor licence holders are subject to separate sponsor duties and must check and retain evidence of the immigration status of workers they sponsor, irrespective of whether the arrangement falls within the civil penalty scheme.

WHAT WILL CHANGE?

From 1 October 2026, the statutory regime will be expanded to cover employers in the UK who employ workers

• under a contract of employment, service or apprenticeship;
• under a worker’s contract;
• as an individual subcontractor;
• through an online matching service that provides details of an individual service provider to potential clients or customers; or
• where the employer is contracted to provide work or services to a third party and then contracts all or part of that work or those services to another employer that provides workers to carry out the work.

The reforms do not simply extend the same rules to every independent contractor. The nature of the relationship and how the arrangement operates in practice will be critical.

DIRECT CONTRACTUAL RELATIONSHIPS

Where an employer has a direct contractual relationship with the individual worker, the position is relatively straightforward: the employer will be responsible for carrying out a prescribed right to work check before the individual starts work.

If the worker has time-limited permission, the employer must also complete any required follow-up check before the statutory excuse expires.

There will continue to be three recognised checking routes:

• A manual right to work check
• A Home Office online right to work check
• A check using a Right to Work Digital Verification Service Provider

EXTENDED LIABILITY IN NON-DIRECT CONTRACTUAL ARRANGEMENTS

The more significant change for many organisations is the introduction of extended liability. Civil penalty liability may extend beyond the employer that has the direct contractual relationship with the worker in certain contractual arrangements:

Subcontractors

Where a person is under a contract to provide work or services to a third party and then enters into a contract with another employer who employs workers to carry out all or part of the work or services required to fulfil that contract.

This will be particularly relevant to employers using outsourced labour, managed service providers, subcontractors, agency-style supply chains or multi-tier contractor arrangements.

Example: A facilities management company contracts with a corporate client to provide cleaning services across the client’s offices. The facilities management company then subcontracts the night-cleaning work to a separate cleaning company, which supplies the individual cleaners. If one of those cleaners is found to be working illegally, the Home Office will first seek to identify the direct employer of the cleaner. If the direct employer cannot be identified, or the prescribed requirements have not been met, the facilities management company may face extended liability because it is upstream in the contractual chain for the work being performed.

Online Platforms and 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 that client or customer.

Example: An online platform maintains a register of self-employed handypersons, cleaners or tutors, allows customers to submit job requests, matches the customer with a service provider and charges a commission for the match. If the service provider who performs the work is found to be working illegally, the platform could potentially be brought within the extended liability regime depending on the arrangements and whether it has complied with the prescribed requirements. This will be relevant to gig economy platforms, online labour marketplaces and businesses that facilitate paid work or services through a digital matching model.

Substitution Workers

Where an employer engages an individual to provide work or services and the contract permits that individual to substitute another person to perform the work or services in their place.

Example: A business engages a self-employed delivery driver under a contract for services. The contract allows the driver to send a substitute driver to complete deliveries. If the substitute performs the work and is found to be working illegally, the business may be exposed if it has not put in place and operated appropriate substitution controls, including ensuring that the substitute’s right to work is checked before they start work. This change is particularly important where businesses use contractor models that include substitution clauses, including in delivery, logistics, cleaning, care, events, security, hospitality, facilities management and technology services.

The draft guidance makes clear that the Home Office will first seek to identify the employer with the direct contractual relationship with the worker. Extended liability is intended to operate where that direct employer cannot be identified or where the prescribed requirements have not been met. The Home Office will consider the nature of the contractual arrangements and the extent to which each party has complied with the prescribed requirements.

ARE GENUINELY SELF-EMPLOYED INDIVIDUALS EXCLUDED?

The draft code of practice on preventing illegal working (the draft Code) makes clear that the extended liability provisions do not apply to persons acting solely as end-users, clients or customers of a service, or who commission or purchase work or services, where they are not themselves under a contract to provide that work or those services onwards to a third party as part of a chain of contracts.

In practical terms, this means the following types of arrangements should usually fall outside the extended liability provisions:

• A Corporate Client Buying a Service for Its Own Business Use: For example, a company contracts with a catering supplier to provide catering for its own staff canteen. The company is the end-user of the catering services and is not providing those catering services onwards to a third party. On the wording of the draft Code, the company should not be within the extended liability provisions merely because it has purchased the service.
• A Household Customer Buying Services From a Tradesperson: For example, an individual homeowner contracts directly with a plumber to repair a boiler at their home. The homeowner is simply purchasing a service for personal use and is not supplying that service onwards to anyone else.
• A Business-to-Business Contract for the Purchase of a Service, Rather Than the Supply of Individuals: For example, a business purchases an IT support service from an external provider for its own internal systems. The customer is buying an outcome or service for itself and is not under a separate obligation to provide that IT support service onwards to a third party.

The draft Code also states that individuals who are genuinely self-employed, operating in business on their own account, trading in their own name or as part of their own business, and contracting directly with clients or customers for the provision of work or services are not in scope of the scheme.

This includes services provided directly to members of the public or under traditional business-to-business contracts for the supply of services, wherein the arrangement is for the purchase of a service rather than the employment of an individual to carry out work or services.

However, the draft Code also warns that this exclusion does not cover individuals who obtain work through an intermediary, platform or similar arrangement where the individual is not operating an independent business in their own right.

FURTHER GUIDANCE

The next LawFlash in this series will look at how a statutory excuse against extended liability can be established.

For a deeper discussion of these issues, please join us on 10 September for our webinar Expansion of UK Rights to Work Regime: Understanding the Changes, where we will explore the practical implications of the changes and the steps employers should take now to prepare.