U.K. businesses could face a major expansion in right-to-work responsibilities from Oct. 1, 2026, as new rules extend beyond traditional employees to cover a wider range of workers and, in some cases, businesses further up subcontracting chains.
The changes could affect companies that rely on agency staff, casual workers, individual subcontractors, gig workers, online matching services and outsourced providers.
Liability Moves Beyond the Direct Employer
Under the existing system, businesses are generally responsible for checking the right to work of people they directly employ. The new regime expands the definition of employment for right-to-work purposes and introduces an extended liability framework.
That means some organizations could face penalties even when an illegal worker is not directly employed by them, according to draft guidance from the U.K. government.
Liability may arise in subcontracting chains, online matching arrangements and situations where a worker can send a substitute to perform the work. The rules are designed to address modern working arrangements where multiple businesses may be involved in delivering the same service.
Clients and end users purchasing services for their own operations are generally outside the extended liability rules, according to the draft guidance.
Penalties Can Reach £60,000 Per Worker
Businesses found liable for illegal working could face civil penalties of up to £60,000 per worker. Other potential consequences include sponsor licence revocation, business disruption and, in cases where an organization knowingly employed someone without the right to work or had reasonable cause to believe that was the case, criminal penalties.
The changes stem from the Border Security, Asylum and Immigration Act 2025 and are expected to take effect for relevant working arrangements beginning on or after Oct. 1, 2026.
The Challenge Is Figuring Out Who Is Covered
One of the biggest complications is determining which arrangements fall within the new rules.
The draft Home Office guidance distinguishes between genuinely independent businesses and workers who may be described as self-employed but whose working arrangements operate more like employment. Labels alone will not determine whether a right-to-work check is required.
For example, a genuinely self-employed professional operating an independent business and contracting directly with clients may fall outside the rules. But casual, temporary and some gig economy arrangements could be treated as employment for right-to-work purposes.
Businesses may also need to look more closely at subcontractors and the working arrangements further down their contractual chains.
Contracts Alone May Not Protect Businesses
Organizations seeking protection from extended liability will need more than a clause requiring suppliers or subcontractors to follow right-to-work rules.
The proposed framework includes prescribed contractual requirements, controls around worker substitution and systems to verify that the person carrying out the work is the same person whose right to work was checked.
Businesses using digital providers for right-to-work checks will also need to ensure those providers are properly registered and authorized for that purpose under the updated system.
With the rules set to begin in October, workforce compliance may become a larger issue for procurement, HR, legal, operations and companies that rely heavily on contractors or outsourced labor.
