This autumn will see the biggest shake-up of right to work legislation in a decade. The Home Office has published draft guidance ahead of the proposed implementation date of 1 October 2026, and we now know that the new requirements will substantially broaden the range of working arrangements that fall within the scope of right to work obligations and potential liability.
The changes will affect not only traditional employers, but also businesses that engage workers through wider labour models, supply chains, subcontracting arrangements and online matching platforms.
The amended regime will require businesses to look more carefully at how work is arranged, supplied and performed in practice. The key question will be whether a business is engaging an individual to provide labour, or whether it is simply buying a service from an independent business.
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Expanded definition of employer
The first major change is the expansion of the definition of an employer for the purposes of the illegal working civil penalty regime. The legislation will expand the scope of the regime to include:
Employees
Individuals engaged under a worker’s contract, such as those on zero-hours contracts and agency workers
Individual subcontractors, such as gig-economy workers; and
Certain arrangements involving online worker/client matching services.
This means that businesses operating labour platforms, using gig-economy models, or relying on flexible non-employee labour will find that from 1 October, they will be treated as an employer for right to work purposes.
The label given to the arrangement will not be determinative. The Home Office will look at the substance of the arrangement, including who arranges the work, who supplies or controls access to the labour, and who is responsible for ensuring that the individual carrying out the work has permission to do so.
There will, however, remain an important distinction between engaging a person to provide labour and purchasing a service from an independent business. A business or individual buying a defined service from a business will not be required to undertake right to work checks on the individuals who deliver that service. However, each arrangement will need to be assessed on its facts.
Introducing extended liability
The second major change is the introduction of extended liability. This is particularly important for organisations operating in sectors where work is delivered through complex contractual chains, including construction, facilities management, logistics, and warehousing.
Extended liability means that, in certain circumstances, civil penalty exposure may move beyond the employer of the worker. For example, where a construction company is contracted to build a new facility, it may engage third-party contractors to undertake elements of the work, such as a bricklaying company or an electrical fitting company. If an illegal working situation arises within the third-party company, the original contractor may be held liable for a civil penalty, even though it would not be defined as the employer.
Similar principles apply to online matching services that introduce businesses to end users where the online matching service can be subject to extended liability, and to arrangements where a worker is permitted to substitute another individual to carry out the work, as is common in the gig economy. In this scenario, the gig economy company could be liable under extended liability if the substitute did not have a right to work.
This does not mean that every organisation in a supply chain will automatically be liable. The direct employer remains responsible for carrying out the right to work check and establishing a statutory excuse. The extended liability provisions do not simply transfer that responsibility to another party. However, where the direct employer cannot be identified, or where the contractual arrangements are unclear, the Home Office may look further along the chain to determine liability.
Establishing a statutory excuse
For employers, under the expanded definition, a statutory excuse can be secured by completing a right to work check in the prescribed manner on all employees, workers, individual subcontractors and individuals engaged on their platform, as relevant.
Where extended liability may arise, businesses will need to be able to demonstrate that they have taken reasonable and proportionate steps to ensure right to work compliance. This is likely to require more than simply including a generic compliance clause in a contract.
Prescribed contractual arrangements should require labour providers, subcontractors or service providers to carry out prescribed right to work checks, restrict further subcontracting without consent, replicate right to work obligations down the chain, permit audits, and cooperate with Home Office investigations. Businesses should also retain evidence of the steps they have taken, such as contracts, audit records, assurance information, compliance reviews and records showing how concerns were identified and addressed.
Where substitution is permitted, employers will need robust controls to ensure that substitutes are not allowed to work until their right to work has been verified. Responsibility for checking a substitute should not be delegated to the original worker.
Businesses should also have systems to confirm that the individual actually carrying out the work is the same person whose right to work has been checked. Depending on the operating model, this may involve identity cards, workplace passes, attendance systems, biometric or digital verification processes, or other proportionate identity controls.
What should employers be doing now?
Businesses should use the period before 1 October 2026 to map their workforce and supply chain arrangements. This should include employees, workers, agency labour, subcontractors, platform workers, substitute arrangements and any online matching services. Particular attention should be given to high-volume, high-turnover or higher-risk labour models.
Contracts, onboarding processes, right to work policies, audit rights and record-keeping procedures should be reviewed and updated. HR, procurement, operations and contract management teams will all need to understand the expanded regime, because compliance will no longer sit solely within the traditional recruitment process.
The forthcoming changes represent a significant shift in the UK’s approach to illegal working compliance. Organisations that rely on flexible labour models or layered contractual arrangements should act now to understand where responsibility sits, whether extended liability could arise, and what evidence they would need to produce if challenged by the Home Office.
Acting now will help minimise the risk of costly civil penalties once the new regime comes into force.
Find out how these changes could affect your business here
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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