Right to Work Reforms from 1 October 2026: What Employers Need to Know

At a Glance

• On 1 October 2026, new right to work duties came into effect under the Border Security, Asylum and Immigration Act 2025.
• The government also published a new Code of Practice on Preventing Illegal Working alongside updated guidance for employers.
• These changes widen who counts as an “employer” for right to work purposes and create new rules about when liability can extend along a chain of contracts. The aim is to stop organisations from avoiding right to work obligations simply by using more complex working arrangements.

New rules on right to work checks came into force on 1 October 2026 under the Border Security, Asylum and Immigration Act 2025. The government has also published a new Code of Practice on Preventing Illegal Working and updated guidance for employers. These changes widen who counts as an “employer” for right to work purposes and create new rules about when liability can extend along a chain of contracts. Businesses that use subcontractors, outsource work, operate online platforms, or allow workers to send substitutes should review their arrangements now for compliance.

What Is Changing?

Previously, the duty to carry out right to work checks mainly fell on employers who hire people under a contract of employment.

From 1 October 2026, the duty also applies to:

• People who engage individuals under a worker’s contract (where someone personally performs work or services but is not an employee in the traditional sense)
• People who engage individual subcontractors
• Online matching services that connect service providers with clients or customers

These changes reflect the reality that many people now work through platforms, gig arrangements, and subcontracting chains rather than in traditional employment. The aim is to stop organisations from avoiding right to work obligations simply by using more complex working arrangements.

What Is Extended Liability?

Under the previous rules, the employer who has the direct contract with the worker is responsible for carrying out the right to work check. From 1 October 2026, liability may in some cases extend beyond that direct employer to another organisation in the chain. However, the direct employer still has to carry out the actual right to work check.

Contractual Chains

Extended liability may apply where a business is contracted to provide work or services to a third party and brings in another organisation to supply the workers needed to do that work.

Example: A property developer wins a contract to build new homes and hires other businesses through a chain of contracts to supply workers for the project. Because the property developer is the one contracted to deliver the work to the third party and has set up the chain of contracts to get it done, it may be treated as the employer of individuals working through that chain. This means the property developer could face a civil penalty if any of those workers are found to be working illegally, even though it does not employ them directly.

Online Matching Services

Extended liability may also apply where an online platform matches a service provider with a client, and the service provider then enters into a contract with the client.

Example: An online platform connects a homeowner with an electrical services business. That business then sends one of its workers to do the job. Since the online platform matched the service provider with the customer, and the two parties entered into a contract because of that match, the platform may be treated as the employer of the worker who carries out the services. This means the platform could be liable if that worker is found to be working illegally, even though the worker’s direct contract is with the electrical services business.

Substitution Arrangements

Extended liability may arise where a worker is allowed to send someone else to do the work in their place.

Example: A food delivery platform lets a registered courier arrange for another person to make deliveries on their behalf. Because the platform employs the courier under arrangements that allow substitution, the platform may be treated as the employer of whoever carries out the deliveries, including any substitute. This means the platform could be liable if the substitute is working illegally, even if the platform did not know a substitution had taken place.

Important Limitation

The Home Office has made clear that extended liability does not automatically apply to every organisation in a contractual chain. It will usually look for the person responsible for the relevant contractual arrangements, rather than treating everyone in the chain as liable.

Which Businesses Are Most Likely to Be Affected?

These reforms are most relevant to organisations that:

• Deliver services through subcontracting chains
• Outsource work to other providers
• Run online platforms or gig-economy services
• Allow substitution arrangements

What Arrangements Are Not Usually Affected?

The Home Office has confirmed that extended liability does not apply just because a business buys services for its own use.

Cleaning contracts: A retailer that hires a cleaning company to clean its stores is not caught by the extended liability rules. The cleaning company, as the direct employer of the cleaners, remains responsible.

Agency workers: A manufacturer that gets temporary workers through a staffing agency for use in its own workforce is also outside the extended liability rules. The staffing agency remains responsible as the employer of the workers.

Independent businesses: A genuinely self-employed person running their own business, such as a plumber providing services directly to multiple clients, is not covered by the Right to Work Scheme.

What Are the Potential Penalties?

Employers who are found to have employed someone without the right to work face significant penalties:

• Financial: civil penalties of up to £45,000 per illegal worker for a first breach or £60,000 for a repeat breach within three years.
• Criminal: where the employer knew or had reasonable cause to believe a worker was not allowed to work, up to five years’ imprisonment and an unlimited fine.

What Should Employers Do Now?

Now that the new rules are in force, employers should:

• Review subcontracting and outsourcing arrangements
• Map out any contractual chains through which work or services are delivered
• Check whether any contracts include substitution clauses
• Make sure contracts include appropriate right to work compliance terms
• Review right to work checks and audit procedures
• Consider whether additional steps are needed to establish a statutory excuse under the new extended liability rules

Key Takeaway

The October 2026 reforms do not make every client or service buyer liable for illegal working. However, businesses that provide work or services through subcontractors, supply chains, online platforms, or substitution arrangements should look carefully at how their contracts are set up. Liability now extends beyond the direct employer to the organisation that arranged the working relationship in certain circumstances.