Right to Work reforms from 1 October 2026: what employers should know

Employers that engage labour through agencies, contractors or other flexible workforce arrangements face additional Right to Work obligations and liabilities from 1 October 2026. Any organisation which uses such arrangements should audit their processes urgently to ensure compliance with the new regime.

What is changing?

From 1 October 2026, changes introduced by the Border Security, Asylum and Immigration Act 2025 and reflected in the new Code of Practice on Preventing Illegal Working (discussed in more detail here) significantly expand the scope of the right to work regime.

The requirement for employers to carry out compliant right to work checks before employment commences currently applies only to employees. Doing the check provides a statutory excuse against the civil penalty on the employer if an individual is later found not to have the right to work.

The imminent changes extend the obligation beyond “traditional” direct employees, to wider arrangements including workers engaged under a worker’s contract, individual subcontractors in relevant contracting chains and other labour supply arrangements such as service providers matched with clients or customers through an online matching service.

Depending on the detail of the arrangements, organisations using agency workers, contractors, zero-hours arrangements, individual consultancy arrangements, subcontracting arrangements or complex supply chains may well face additional obligations and potential liabilities from 1 October.

The new obligation applies to new right to work checks from 1 October, so it does not require new checks in respect of existing workers, but it will require compliance where follow-up checks are required for existing workers.

Financial and other consequences

The financial exposure is significant. As with the current regime in relation to employees, a civil penalty of up to £45,000 applies for each illegal worker for a first breach, rising to up to £60,000 for repeated breaches.

Sponsor licence holders may also face separate compliance action, including suspension or revocation of their licence.

Extended liability

The new rules create extended liability for non-direct contractual arrangements, that is: where a person providing work or services to a third party enters into a contract with another employer to provide that work or those services; where an online matching service matches a service provider with a client or customer and the provider contracts with that client or customer; and where a contract with an in-scope individual contains a right of substitution.

Where such arrangements exist, the direct employer remains responsible for carrying out the right to work checks, but where that employer cannot be identified, or where prescribed requirements have not been met, the civil penalty may be imposed on persons upstream in the chain of contracts.

The prescribed requirements must be put in place before work starts and include putting specific contractual provisions in place (requiring right to work compliance, prohibiting unauthorised subcontracting, permitting audits and requiring cooperation with Home Office investigations) and maintaining ongoing identity verification systems to ensure that the worker is actually the individual whose right to work was checked.

This will be a significant change in particular for arrangements between gig-workers and platform operators.

Whilst standard agency arrangements will not usually fall within the new extended liability, it is still recommended to include terms in the contract with the agency making clear that the agency remains the employer and has responsibility for conducting right to work checks. However, in some circumstances, agency arrangements might fall within the extended liability rules – e.g. if you have a contract to provide work or services to a third party and decide to use an agency to source workers to provide that work or those services.

Key actions

If they have not already done so, employers should:

audit their labour supply arrangements, including agency arrangements, contracting and subcontracting arrangements, zero-hours arrangements and other arrangements under which individuals provide services to the business and take appropriate action;
review contracts with agencies and labour suppliers, so that responsibility for right to work checks is clear;
amend contracts where necessary to include the required contractual provisions and consider including appropriate indemnities; and
update existing procedures for Right to Work checking and record-keeping, to reflect the new rules.

If you have any concerns about your arrangements or require assistance in ensuring compliance, our Employment and Immigration teams will be happy to advise. Please contact Bob Cordran (Partner – Employment) or Dipesh Shah (Partner – Immigration) if you have any queries.