Author: Sam Bass (Partner, Newfield Law), Sam Evans (Solicitor, Berry Smith).
Most employers will already know that they must check that their employees are allowed to work in the UK. However, from 1 October 2026, these rules extended to certain contractors and casual workers and can create liability where another business- such as an agency- supplies individuals to help deliver services to your customers.
The new rules therefore significantly increase the risk of businesses receiving an illegal working penalty if they do not comply with the new right to work checks. It is important to note that, whilst existing staff do not need re-checking, any follow-up check from 1 October must comply with the new rules.
This article sets out what the changes to the checks entail, along with some practical considerations for employers.
Wider scope of ‘employers’
The existing regime already applies to employees working under a contract of employment. This requirement means that an employer must carry out a right to work check before employment starts and can face a civil penalty if it employs someone illegally without a statutory excuse. Civil penalties can reach £45,000 per worker in the case of a first offence. For a repeat breach, penalties can reach £60,000 per worker.
For the purposes of the right to work scheme, from 1 October 2026, any reference to an ‘employer’ of an ‘individual’ will include:
· Employing an individual under a contract of employment
· Engaging an individual under a worker’s contract
· Engaging an individual sub-contractor
· Operating an online matching service and providing details of an individual service provider to clients and customers.
As you can see, this wide definition goes well beyond the traditional ‘direct employer’ previously in force, bringing a whole new array of ‘employers’ within scope. In practical terms, relying on the fact someone is employed by an agency or engaged as a contractor will no longer be sufficient.
Three Areas to Review
1. People You Engage Directly
Review how you engage people and instruct suppliers, and what work they do for your business. Your obligations will differ depending on the arrangement. For example, right to work checks generally extend to certain casual workers and individual subcontractors engaged directly, whereas buying services from an independent business may require different safeguards. Labels such as “self-employed” do not determine which rules apply.
2. People Your Suppliers Provide
If another business supplies people to help deliver services to your customers, you may face “extended liability” if someone works illegally. The direct employer remains responsible for carrying out checks, but your business may need contractual safeguards and oversight. Buying services solely for internal operations will not normally trigger this specific extension.
3. Substitutes and Online Platforms
If an individual engaged directly can send a substitute, the substitute must be checked before starting work and appropriate identity controls must be in place. Certain online services that match workers with businesses also fall within scope.
What Should Businesses Do Now?
1. Map Your Arrangements
Identify everyone who works for you and categorise them by engagement type: employees, workers, casual workers, freelancers, individual subcontractors and suppliers involved in delivering services to your customers. Look at how each arrangement works in practice, not just the contract wording. Compare these arrangements against the revised definitions in the Code of Practice to determine which relationships fall within the expanded regime and where liability may arise. This assessment will also inform subsequent policy updates and staff training.
2. Tighten Supplier Terms
Where extended liability applies, put the required written statement in place before any work commences. It must address right to work checks, further subcontracting, audit rights, action if illegal work is identified, and cooperation with the Home Office. It is pertinent to support these terms with proportionate oversight.
3. Keep Checks and Records on Track
Use the appropriate checking method for each individual:
a) Home Office online check using a share code
b) Permitted manual document check
c) Check through a registered digital verification service provider, where permitted
d) Home Office Employer Checking Service, where applicable
Keep evidence of each check and diarise any required follow-up checks. This will ensure you are in a strong position if the Home Office carries out an inspection.
4. Review supplier, agency and subcontractor contracts
Consider whether existing contractual labels accurately reflect the working arrangements and whether those arrangements fall within the expanded regime.
This article has been jointly prepared by both Newfields Law and Berry Smith Lawyers. Newfields specialises in UK immigration and can help businesses review their workforce and supply-chain arrangements, update supplier agreements, audit right to work compliance and train their teams. For any queries relating to immigration, or right to work checks, speak to your Berry Smith contact or email sam@newfieldslaw.com.
Please note the contents of this article are for information only and do not constitute legal advice.