Expansion of UK Right to Work Rules, Part 2: Establishing a Statutory Excuse Against Extended Liability

Draft UK right to work guidance would expand the steps some businesses need to take when workers are supplied through contractors, agencies, platforms, or other third parties. Businesses should review their contracts and worker-checking processes before the proposed changes take effect on 1 October 2026.

For direct employers, the statutory excuse is established by carrying out the prescribed right to work check before employment starts and, where relevant, carrying out follow-up checks before a time-limited right to work expires.

For nondirect contractual arrangements, the draft code of practice (the draft Code) on preventing illegal working and draft employer guidance introduce a different form of statutory excuse. A person who is not in a direct contractual relationship with the worker can establish a statutory excuse against extended liability if the prescribed requirements have been met in full and can be evidenced.

This is an evidence-based defence. The business must be able to demonstrate that it put the required contractual, control, and identity verification measures in place and operated them in practice. The draft Code states that a person seeking to rely on a statutory excuse must retain sufficient evidence of the steps taken and provide evidence of compliance on request.

The prescribed requirements fall into three categories.

PRESCRIBED REQUIREMENT 1: WRITTEN CONTRACTUAL TERMS

Where a business is under a contract to provide work or services to a third party and contracts with another employer to provide or arrange delivery of that work, or where an online matching service matches a service provider with a client or customer, a written statement must be in place before the work or service starts.

The written statement must include terms requiring the employer or service provider to

• conduct prescribed right to work checks on any individual employed to perform the relevant work or services;
• ·not further subcontract the work or services without prior written consent, and to replicate equivalent right to work obligations in any permitted subcontracting;
• permit audits of right to work compliance;
• allow enforcement action where illegal working is identified and a statutory excuse has not been established, including potential suspension or termination of the contract; and
• cooperate with any Home Office investigation, including by providing information about the purpose and makeup of the contractual chain and details of each employer or service provider involved.

Evidence That May Be Provided

Examples of evidence that may be provided are set out below. This list is not exhaustive. What evidence is appropriate will depend on the nature of the arrangement, the risk of illegal working or noncompliance with right to work checks arising from the arrangements, and the size and complexity of the contractual chain.

• Details of contractual arrangements and copies of agreements or terms and conditions
• Audit records
• Assurance information received from employers or service providers that right to work checks have been carried out
• Records of compliance reviews
• Information showing how concerns were identified and acted upon

For employers, this means that standard supplier, subcontractor, agency, managed service, and platform agreements should be reviewed and updated before 1 October 2026.

PRESCRIBED REQUIREMENT 2: SUBSTITUTION CONTROLS

Where a contract permits substitution, the employer will only obtain a statutory excuse if, before the work or service starts, it has implemented processes ensuring that

• a prescribed right to work check is carried out for any substitute;
• responsibility for those checks is not delegated to the individual carrying out the work or services;
• ·no substitute starts work before their right to work has been verified;
• contractual provisions allow action to be taken where the employer or worker knows, or has reasonable cause to believe, that a substitute is working illegally; and
• throughout the engagement, the employer ensures that the worker and any registered substitute are the same individuals on whom right to work checks have been carried out.

Evidence That May Be Provided

• Details of contractual arrangements, or copies of agreements, or terms and conditions relating to substitution
• Records of right to work checks undertaken on substitutes
• Records demonstrating that substitutions were authorised in accordance with the employer’s processes
• Records identifying the individual who carried out work and the period for which the work was undertaken
• Evidence of identity verification measures used to confirm that the individual carrying out the work was the same individual whose right to work had been checked
• Records of any audits or compliance activity undertaken by the employer, and evidence that appropriate action was taken where substitution occurred outside agreed processes or where illegal working was identified or suspected

The draft Code states that the Home Office will consider whether the employer has implemented and maintained these processes in a reasonable and proportionate way. It will also consider whether the substitution controls reflect how the arrangements operate in practice.

It will not be enough to include a substitution clause in a contract and assume that the original contractor is responsible for any substitute. Employers will need a practical process to identify substitutes, check them before work starts, and prevent unchecked substitutes from performing work.

PRESCRIBED REQUIREMENT 3: IDENTITY VERIFICATION SYSTEMS AND PROCESSES

A business in a contractual chain, an online matching service, or an employer operating a substitution model must maintain proportionate systems and processes to ensure that the individual carrying out the work is the same individual on whom a right to work check has been conducted.

The draft guidance gives the following examples of possible systems and processes:

• Identity cards or workplace access passes
• Facial recognition technology, including the use of registered RtW DVSPs
• Biometric or attendance management systems
• Verification against training records, qualifications, or licences
• Identity reverification at set intervals, such as when a worker starts a shift, begins a new assignment, or takes on a new task, provided this is no less than once in any 24-hour period of activity

A business may rely on identity verification systems operated by another party in the chain or by a third-party provider, such as a registered RtW DVSP, but only if it has taken reasonable steps to satisfy itself that those systems are effective and that the prescribed requirements are being met.

These requirements mean that right to work compliance will no longer be purely an HR onboarding issue. It will also require input from legal, procurement, contract management, operations, site access, and vendor management teams.

FURTHER GUIDANCE

The next and final LawFlash in this series will examine the practical rules for manual, online, and digital right to work checks, including the expanded role of registered digital verification providers.

For a deeper discussion of these issues, please join us on 10 September for our webinar, Expansion of UK Right 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.