Key takeaways
Right to work obligations expand
New rules extend checks beyond traditional employee arrangements.
Contract labels no longer decisive
Workforce status depends on reality, not contractual descriptions.
Supply chain risks increase
Extended liability may expose businesses to third-party breaches.
Halloween may be just around the corner, but for many employers the real focus this year will be changes to the UK's Right to Work regime, which come into force on 1 October 2026. The regime is set to expand beyond traditional employees, potentially bringing a wider range of contractors, subcontractors and other working arrangements into scope.
Following the Home Office's updated draft guidance, businesses will need to look beyond contractual labels and consider how their workforce arrangements actually operate in practice.
With the new rules approaching, could there be something lurking in your workforce arrangements?
What changes from 1 October 2026?
From 1 October 2026, the definition of an employer for these purposes can encompass organisations engaging individuals:
under contracts of employment
under a worker's contract
as individual subcontractors, or
through an online matching service which provides details of individual service providers to potential clients or customers.
The new civil penalty provisions will begin on or after 1 October 2026 and the new extended-liability provisions will also apply to relevant contractual arrangements entered into on or after 1 October 2026.
This is an important development for organisations whose workforce models extend beyond conventional employees. Businesses may therefore find that individuals who have historically sat outside their usual Right to Work processes require closer scrutiny from October.
Beware of labels in disguise
One of the most important messages in the draft guidance is that businesses should look at the substance of a working arrangement, rather than simply accepting the label attached to it.
Calling someone a ’contractor’, ’consultant’ or ’self-employed’ will not, by itself, determine an organisation's responsibilities under the Right to Work Scheme. The Home Office indicates that organisations should consider the overall nature of the arrangement, including both the contractual terms and what actually happens in practice. No single factor will be determinative. In other words, the label on the tin may not tell the whole story.
For organisations with large contractor populations, complex supply chains or less traditional workforce models, this could mean that potential Right to Work risks are hiding in plain sight.
If you haven’t already done so, we recommend conducting a workforce-mapping exercise ahead of 1 October 2026 to uncover potentially affected arrangements and identify any compliance gaps before the new rules take effect. Only new contract arrangements from 1 October 2026 will fall within the new rules. Please get in touch with our Immigration team if you would like us to support you with this review and help ensure there are no unwelcome surprises this October.
Does every self-employed contractor now need a Right to Work check?
No, there’s no need to panic.
The draft guidance expressly recognises that individuals operating genuinely independent businesses may fall outside the Right to Work Scheme.
For example, the guidance describes a self-employed plumber who advertises services directly to the public and works for multiple customers. In this scenario, the plumber is operating an independent business and falls outside the Scheme, so a Right to Work check should not be one of their concerns.
Similarly, the guidance gives the example of a graphic designer engaged for a project through the designer's own personal service company. Where the client contracts with that company for the provision of services rather than engaging the individual directly within the Scheme, the guidance states that the client does not need to carry out a Right to Work check.
The difficulty, of course, lies in determining where the line falls.
For some organisations, particularly those with varied contractor populations or complicated supply chains, that distinction may not immediately be obvious. What appears to be a conventional contractor arrangement could look rather different once the contractual and practical reality is examined.
The message for employers is therefore simple: understand how the rules apply to your workforce arrangements before they take effect.
As the new rules take effect from 1 October 2026, now is the time to shine a light on your workforce arrangements, identify where the new rules may create exposure and take appropriate action before any compliance issues come back to haunt you.
Could someone else’s Right to Work problem come back to haunt you?
Perhaps the biggest potential issue for businesses this October is extended liability.
Under the new regime, the risk of a civil penalty will not necessarily stop with the organisation that has the direct contractual relationship with the person carrying out the work. In certain circumstances, liability can travel further up the contractual chain.
This could be particularly significant for businesses with complex supply chains. Where the Home Office cannot identify the employer with the direct contractual relationship with the worker, and the relevant prescribed requirements have not been met, another organisation upstream in the chain may find itself exposed to civil penalty liability.
In other words, a Right to Work issue further down the contractual chain could potentially create exposure further up it.
The extended liability provisions are not confined to the first tier of contracting. The Home Office will look at the particular contractual arrangements, how they work in practice and whether the relevant requirements have been complied with.
For businesses seeking to protect themselves, simply inserting a Right to Work clause into a supplier contract will not, on its own, be enough. Relevant safeguards will need to be in place before the work begins, and businesses should be able to demonstrate that those arrangements operate effectively in practice.
The new requirements cover areas including contractual protections, controls over subcontracting, audit and enforcement rights, cooperation in the event of a Home Office investigation and appropriate records demonstrating compliance.
For businesses relying on agencies, subcontractors or other intermediaries to provide workers, now is the time to take a closer look at your supply chain and understand not only who you contract with, but who is ultimately carrying out the work.
We can help businesses map their contractual chains, identify where extended liability could arise and review whether their existing arrangements provide adequate protection under the new regime.
Substitution: beware the switch
Where substitution is permitted, businesses will need controls to ensure that any substitute completes a Right to Work check before starting work and is the person who actually turns up to perform it. After all, an unexpected substitute at the door this Halloween could be more trick than treat.
Is the right person carrying out the work?
Right to Work compliance does not end with completing the check. For relevant extended liability arrangements, businesses must have proportionate controls to ensure that the person actually carrying out the work is the person whose Right to Work was checked. We can help identify proportionate controls for your workforce and risk profile.
Why getting it right matters
The consequences of non-compliance are significant. Where illegal working is identified and a statutory excuse has not been established, a business could face a civil penalty of up to £60,000 per illegal worker. Wider consequences can include loss of the ability to sponsor migrant workers, director disqualification, business closure and, in serious cases involving knowing employment of an illegal worker or reasonable cause to believe someone is working illegally, criminal penalties.
With extended liability potentially reaching further up the contractual chain, this is a compliance risk businesses can’t afford to overlook.
Time to shine a light on your workforce
With 1 October creeping closer, now is the time to shine a light on your existing arrangements. Workforce structures, contracting models, substitution arrangements and existing Right to Work processes are just some of the areas that may warrant closer scrutiny.
Rather than waiting for potential issues to emerge in your workforce or supply chain, businesses should thoroughly review their set up. We can undertake a tailored workforce-mapping and compliance review to identify potential exposure and help your business prepare for the new regime.
Please get in touch with our Immigration experts if you would like to discuss how the changes may affect your organisation.
