Expansion of the UK Right to Work Regime

The changes also introduce a new concept of extended liability, meaning that responsibility for illegal working may, in some circumstances, reach beyond the direct “employer” and reach upstream in a chain of contracts.

Organisations that use non-traditional workforce models should review their labour arrangements now. Organisations that fail to comply with the new regime face civil penalties of up to £60,000 per illegal worker, at a time when Home Office enforcement activity is at record levels.

The expanded regime is most likely to affect organisations with flexible or layered labour models, particularly where individuals are engaged outside a traditional employment relationship. This includes sectors such as construction, logistics, warehousing, delivery services and personal services, where subcontracting and gig economy arrangements are common. However, organisations in all sectors may be affected and we encourage employers who have not done so to review their labour arrangements and RTW checking processes without delay.

Impact of the expanded scope

The RTW scheme is the UK's principal mechanism for preventing illegal working. It imposes a legal duty on employers to conduct prescribed checks to confirm that individuals they engage are not disqualified from working by reason of their immigration status. When checks are carried out correctly and in accordance with the published Code of Practice, employers establish a "statutory excuse" — a defence against a civil penalty liability if a worker is later found to be working illegally.

The changes to the RTW regime were introduced in the Border Security, Asylum and Immigration Act 2025 and became effective on 1 October 2026. Updated versions of the Home Office’s Code of Practice on preventing illegal working and the Employer's guide to right to work checks have also been issued. These provide a number of useful clarifications on the practical operation of the new regime, particularly in relation to self-employed arrangements, personal service companies, supply chains and identity verification requirements. Further detail is provided below. 

The reforms expand the scope of the RTW regime by extending it to additional categories of organisations and individuals. Employers (using the broader definition adopted in the Code of Practice) are now required to conduct RTW checks for the categories set out below, in addition to their existing obligations in respect of employees.

Examples illustrating how these provisions apply to the different types of contractual arrangements in scope are provided in the updated Employer’s guide to right to work checks (the guide). 

For many businesses, this will bring into scope categories of workers that have never previously been subject to formal RTW checking processes. Employers will need to revisit their existing compliance processes for each type of contractual relationship. The guide suggests that employers should consider the following factors when determining who is in scope:

• Are individuals personally carrying out work or services under the arrangement? 
• Who engages, supplies or arranges the individuals who undertake the work or services? 
• Who is contractually responsible for providing the work or services and who is responsible for the individuals carrying them out?  
• Is the arrangement primarily for the provision of individuals to undertake work or services, or is the organisation procuring the delivery of a defined service or outcome from another independent business?  
• Is there a chain of contractual arrangements through which work or services are being provided and, if so, what role does each organisation perform within that chain?  
• Who determines, approves or replaces the individuals who undertake the work or services? 
• Is substitution permitted, expected or controlled under the arrangement? 
• What do the contractual arrangements provide, and how do those arrangements operate in practice?  

Increased supply chain exposure

One of the most significant aspects of the reforms is the introduction of a new extended liability regime. Under the new regime, liability may extend beyond the party with the direct contractual relationship with the individual worker and, in some circumstances, reach upstream organisations within a labour supply chain or contractual arrangement. 

As a result, businesses that outsource services or rely on multiple tiers of contractors should review existing arrangements carefully. Compliance can no longer be viewed solely as the responsibility of the direct employer. 

To establish a statutory excuse, the upstream party must put in place and evidence specific prescribed requirements. These include a written statement before work commences, setting out contractual terms that require the direct employer to conduct RTW checks, prohibit unauthorised subcontracting, permit compliance audits, include enforcement provisions for illegal working, and require the direct employer to co-operate with any Home Office investigation relating to illegal working. 

Upstream parties must also maintain identity verification systems to confirm that the individual carrying out the work is the same person on whom a check was conducted. 

Where contracts contain substitution clauses, the employer must ensure that RTW checks are carried out on any substitute before they begin work, and must not delegate checking responsibility to the worker themselves. 

Follow-up checks remain required for workers with time-limited permission to work. These must be completed on or before the expiry date of the worker's existing permission.

Employer guidance: key clarifications

The updated guide, including FAQs in a new Annex C, provides some helpful clarification on the practical operation of the expanded regime. 

Greater clarity on self-employed arrangements, including PSCs

The guide confirms that the regime will generally not apply where an individual is operating an independent business in their own name or through their own company and contracts directly with clients or customers for the provision of services. The guide includes a specific personal service company (PSC) example, stating that where a client contracts directly with an individual's PSC, the arrangement is a business-to-business services arrangement and the client is not required to carry out a right to work check.

However, the guide also emphasises that labels are not determinative, and Annex C confirms that there is no blanket exclusion simply because a worker is described as a contractor, freelancer or consultant, or provides services through a PSC. Whether an arrangement falls outside the regime will depend on the reality of how the work is supplied and performed in practice. The guide also confirms that individuals obtaining work through intermediaries, platforms or similar arrangements remain within scope where they are not operating an independent business in their own right. Organisations relying on self-employed models should therefore continue to assess the substance of the arrangement rather than relying solely on contractual terminology.

Clarification of the end-user exemption

The guide provides a series of worked examples showing when the new extended liability provisions do and do not apply. These examples confirm that the provisions are targeted at contractual chains through which work or services are provided onwards to a third party, rather than organisations purchasing services for their own operations.

For example, a retailer purchasing cleaning services at its own premises is not caught by the extended liability provisions, nor is a manufacturing company obtaining temporary workers for use within its own operations. By contrast, organisations that are themselves contractually responsible for delivering services to a third party and rely on chains of contractors or subcontractors to fulfil those obligations may fall within scope.

More information on identity verification requirements

Both the Code of Practice and the guide make clear that organisations seeking to establish a statutory excuse under the extended liability provisions must have proportionate systems and processes in place to ensure that the individual carrying out the work is the same person whose right to work has been checked.

The Code of Practice gives examples of potential controls, including identity cards, workplace passes, biometric systems, facial recognition technology and periodic identity re-verification. The guide provides additional practical detail, including guidance on preventing impersonation, the use of facial recognition technology and registered digital verification providers, digital identity solutions for supply chains, and the evidence businesses should retain to demonstrate compliance.

The guide recommends that identity re-verification occur at least once in any 24-hour period or shift of work, although the frequency and method should remain proportionate to the operating model and the risk of substitution or impersonation.

Further detail on establishing a statutory excuse under the new extended liability regime

The guide expands on the compliance controls expected by the Home Office, emphasising that contractual terms alone are not enough. The guide provides a non-exhaustive list of evidence that may be provided by organisations seeking to establish a statutory excuse, including details of contractual arrangements, audit records, assurance information received from employers or service providers, records of compliance reviews and information showing how concerns were identified and acted upon.

Impact on contractual arrangements entered into before 1 October 2026

The guide confirms that the expanded regime is not intended to be retrospective. The relevant date is when the contractual arrangement is entered into, not when the work starts or continues. However, organisations should take care in relation to variations, renewals or extensions of existing contracts, with the guide stating that the impact will depend upon the legal and contractual effect of the change.

TUPE transfers and changes of employer

The guide also clarifies the position on transfers. Where TUPE applies, an incoming employer should undertake fresh right to work checks on transferring workers and will ordinarily have a 60-calendar-day grace period from the relevant transfer in which to do so. Where TUPE does not apply to an individual engaged under a contract for services, a new employer entering into an arrangement on or after 1 October 2026 must carry out a right to work check before the engagement begins in order to establish a statutory excuse.

Application of the expanded regime to to agency workers

The guide confirms that standard agency worker arrangements remain largely unchanged, with responsibility for checks remaining with the employment business. However, this should be distinguished from arrangements involving the delivery of services through a contractual chain to a third party, where the extended liability provisions may apply.

Priority action for organisations

We recommend that organisations ensure they have carried out the following steps without delay:

• Audit workforce arrangements. Identify all individuals engaged under worker's contracts, as individual subcontractors, or through online matching services. Determine which arrangements now fall within scope
• Review and update onboarding processes. Ensure RTW checks are integrated into onboarding for all in-scope worker categories, not just traditional employees 
• Review supply chain and subcontracting arrangements. Prepare the required written statements for all contracting arrangements, incorporating the prescribed terms on right to work obligations, audit rights, and enforcement provisions
• Implement identity verification systems. Establish ongoing processes to verify that the individual performing work is the same person on whom the check was conducted, particularly in arrangements involving substitution or supply chains 
• Consider digital solutions. Evaluate the use of a registered RTW Digital Verification Service Provider to streamline checking at scale, especially if the business engages high volumes of flexible or temporary workers
• Train relevant staff. Ensure that HR teams, hiring managers, and procurement staff understand the expanded requirements and the importance of conducting checks before work begins
• Establish record-keeping protocols. Retain copies of all RTW documentation securely in line with Home Office guidance and develop protocols for retention of evidence of prescribed requirements under the new extended liability regime