Expansion of the UK Right to Work Regime

The changes also introduce new concepts 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 begin reviewing their labour arrangements now. With civil penalties of up to £60,000 per illegal worker and increased Home Office enforcement activity, waiting until October 2026 will leave insufficient time to implement the necessary compliance measures.

The reforms are 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 will be affected and we encourage employers 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. The government has now laid regulations to implement the changes, effective 1 October 2026, and has also published a draft Code of Practice on preventing illegal working, to come into force at the same time as the expanded regime. The Home Office has also published a draft updated Employer's guide to right to work checks, providing 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. Once the changes come into force, employers (using the broader definition adopted in the Code of Practice) will be 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 draft updated Employer’s guide to right to work checks.

For many businesses, this will bring into scope categories of workers that have never previously been subject to formal RTW checking processes. The practical question for employers is whether individuals are performing work personally, either directly or through a chain of contractual arrangements. Employers will need to revisit their existing compliance processes for each type of contractual relationship. 

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 draft Code of Practice currently states that 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, and include enforcement provisions for 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 Home Office has published a draft updated Employer’s guide to right to work checks, which provides some helpful clarification on the practical operation of the expanded regime. 

Greater clarity on self-employed arrangements, including PSCs

The draft 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 draft 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 draft guide also emphasises that labels are not determinative. Whether an arrangement falls outside the regime will depend on the reality of how the work is supplied and performed in practice. The draft 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 draft 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 draft Code of Practice and the draft 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 draft Code of Practice gives examples of potential controls, including identity cards, workplace passes, biometric systems, facial recognition technology and periodic identity re-verification. The draft 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.

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

In particular, the draft guide expands on the compliance controls expected by the Home Office, emphasising that contractual terms alone are not enough. The draft 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.

Priority actions before October 2026

We recommend that organisations begin preparation well in advance of the implementation date.

• 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.

Join our webinar: Expansion of the Right To Work Regime

21st July 2026, 1pm - 2pm BST 

Join our webinar to gain practical insight into the reforms and learn what your organisation should be doing now to prepare ahead of their implementation

Register here