Expansion of Right to Work Checks – One Month Before the Changes: What Businesses Need to Know Before 1 October 2026

For many businesses, right to work compliance has historically been viewed as an HR and recruitment issue within traditional employer employee relationships. From 1 October 2026, however, responsibility for preventing illegal working will extend much further, potentially affecting procurement teams, contractor management functions, outsourced service arrangements, platform operators and businesses that engage workforce supply chains.

Which Arrangements Will Now Be Covered?

From 1 October 2026, right to work obligations will no longer be confined to individuals employed under traditional contracts of employment.

The regime will also apply to:

• Individuals engaged under worker contracts;
• Individual subcontractors;
• Certain outsourced labour arrangements;
• Online matching and platform-based services; and,
• Arrangements containing substitution rights, where one individual may perform work on behalf of another.

The draft Home Office guidance expressly states that the definition of "employer" will include those engaging individuals under worker contracts, as individual subcontractors, and online matching services that provide service providers to customers. Liability may extend to upstream organisations within a contractual chain.

Importantly, labels such as "self-employed" or "contractor" will not be determinative. The Home Office has made clear that the assessment will focus on the reality of the arrangement and how work is supplied and performed in practice.

What Remains Outside the Regime?

Not every commercial arrangement will fall within scope.

The guidance confirms that the extended liability provisions generally do not apply where a business is simply purchasing services for its own internal operations. Likewise, genuine business-to-business arrangements involving independent contractors operating through their own companies will generally remain outside the framework.

This distinction will be critical, and many organisations may need legal advice to determine whether their operating models fall within scope or not.

How Can Businesses Protect Themselves?

Businesses that fall within the extended liability provisions will need to establish a statutory excuse against that liability. To benefit from that protection, organisations must demonstrate compliance before work begins. The finalised Right to Work Guidance has not yet been released but, in accordance with the draft version, the requirements are generally believed to be as followed:

1. Contractual Controls - Businesses must have written contractual provisions requiring right to work compliance throughout the relevant contractual chain.

2. Substitution Controls - Where a contractual arrangement between an employer and a worker permits substitution, further steps are required here.

3. Identity Verification - Businesses must have systems ensuring that the individual carrying out the work is the individual whose right to work has been verified. 

What are the Consequences of Non-Compliance?

The risks remain significant. Businesses that fail to establish a statutory excuse may face:

• Civil penalties of up to £60,000 per illegal worker;
• Criminal liability in serious cases;
• A suspension or revocation of the organisation’s sponsorship licence; and
• Public naming as a non-compliant employer.

The Home Office has also made clear that intelligence sharing with HMRC and other enforcement bodies will continue to underpin enforcement activity to identify those businesses who are non-compliant.

Preparing for October 2026

Organisations operating through labour supply chains, outsourcing arrangements or digital platforms should begin reviewing their practices NOW.

Key steps include:

• Mapping workforce supply chains;
• Reviewing contractor and subcontractor arrangements;
• Auditing existing right to work processes;
• Updating contractual documentation;
• Assessing substitution provisions; and,
• Implementing appropriate identity verification controls.

Conclusion

The new right to work framework will mark a significant change for businesses that rely on informal working arrangements or gig economy labour, particularly in sectors such as construction, infrastructure, logistics, recruitment, platform-based services and hospitality.

Businesses operating within these sectors should use the period before implementation to review their contractual arrangements, workforce structures and right to work compliance procedures. In particular, organisations should map any subcontracting or labour supply chains, assess whether substitution clauses exist within their contracts, review onboarding processes and consider whether additional identity verification measures may be required.