Right to Work Changes from 1 October 2026
Written by James Vaughan
As of 1 October 2026, the UK’s Right to Work (RTW) regime has expanded beyond traditional employment relationships to cover certain workers, individual subcontractors, online matching services and substitution arrangements.
New extended liability provisions may expose businesses in some service-delivery chains to civil penalties of up to £60,000 per illegal worker, even where they have not directly engaged the individual.
As a result of the newly published RTW guidance, businesses should proactively review their contractual chains, update relevant agreements and introduce effective audit, substitution and identity-verification controls.
What is Changing?
The definition of ‘employer’ under the RTW scheme will expand to include a person who engages an individual:
Under a worker’s contract;
As an individual subcontractor; or
When operating as an online matching service, providing details of an individual who is a service provider to potential customers.
A new extended liability system introduces a civil penalty which may extend beyond the employer who holds the direct contractual relationship with the worker. Extended liability is intended to apply where:
A person is under a contract to provide work or services to a third party and enters into a contract with another employer providing workers to fulfil that contract;
An online matching service provides details of a service provider to clients or customers, and the service provider enters into a contract with a client or customer; or
An employer employs an individual to provide work or services and the contractual arrangements allow the individual to substitute their work or services to another individual.
In these circumstances, the newly defined ‘employer’ can prevent illegal working and establish a statutory excuse through compliance with the ‘prescribed requirements’ (see below). The Home Office make clear that contractual labels will not be conclusive. Instead it will be the substance of the arrangement and how it operates in practice that will be of greatest relevance.
Which Arrangements are Outside the Extended Liability Regime?
The new RTW guidance confirms that the following arrangements will generally fall outside scope of the new RTW scheme:
Genuinely self-employed individuals operating independent businesses and contracting directly with their clients or customers; and
A client, customer or end-user who is purchasing work or services for their own internal operations.
Does Every Business in a Supply Chain Become Liable?
No, the employer with the direct contractual relationship remains responsible for carrying out the prescribed RTW check. The extended liability provisions do not automatically transfer that responsibility to another person in the contractual chain, nor do they make that person liable for another employer’s failure to carry out a RTW check.
However, where the employer in the direct contractual relationship with the worker cannot be identified, the Home Office may consider the contractual arrangements through which the work is being provided when determining liability under the extended liability provisions.
Where extended liability applies, three requirements must be completed before the work commences to establish a statutory excuse against extended liability for contracts in place from 1 October 2026 (see below). This applies regardless of whether the employer in the direct contractual relationship with the worker can be identified.
Where the Home Office is unable to identify the employer who has the direct contractual relationship with the worker and where a statutory excuse against liability for a civil penalty has not been established, liability for payment of a civil penalty may extend beyond that direct employer to another person upstream in the chain of contracts through which the work is being delivered.
The Home Office would not normally expect to issue a civil penalty notice to more than one employer in a contractual chain for the same illegal worker. Extended liability does not mean that every organisation in the chain is automatically liable for a civil penalty.
How can Businesses Establish a Statutory Excuse for the Purposes of Extended Liability?
Prescribed requirements must be met before the work begins to enable an extended liability statutory excuse to be established. They cover three main areas:
(1) Contractual Terms and Conditions
Where a person is under a contract to provide work to a third party and enters into a contract with another employer to provide or arrange for the delivery of the work, they must have a written statement in place. There is no prescribed form of words that must be used verbatim but this must include:
Requiring the employer or service provider to carry out prescribed RTW checks on any individual employed to perform the relevant work.
Not further subcontracting of work without prior written permission and replicate equivalent RTW obligations in any permitted subcontracting arrangement.
Permitting the person or the online matching service to conduct audits of the employer or service provider’s compliance with prescribed RTW checks to establish a statutory excuse. There is no prescribed requirement on the audit frequency; the extent and frequency of appropriate due diligence or assurance activity will depend on the circumstances, including the risk of illegal working and the nature, size and complexity of the contractual arrangements.
Enabling the person or the online matching service to take enforcement action against the employer or service provider where illegal working is identified and a statutory excuse has not been established, as well as equivalent provisions in relation to the direct contractual relationship between the employer or service provider and the individual who is carrying out the work. This action can include suspension or termination of the contract.
Requiring the employer or service provider to cooperate with Home Office investigations relating to illegal working by providing: (a) Information relating to the purpose and make up of the chain of contracts through which the work is being provided; (b) Details of each employer or service provider involved; and (c) Any other information the Home Office considers potentially relevant to the investigation.
(2) Substitution Controls
A statutory excuse is only established against extended liability in the context of substitution controls if the following are put in place before the work commences:
A valid RTW check is carried out on any substitutes.
Responsibility for carrying out RTW checks is not delegated to the workers themselves.
No individual may carry out work as a substitute before their RTW has been verified.
Contractual provisions are in place between the employer and the worker where the employer or the worker know, or have reasonable cause to believe, that a substitute is working illegally. This action can include suspension or termination of the contract.
For the duration of their employment, the employer ensures the worker and their registered substitute(s) are the same individuals on whom a RTW check has been carried out.
A contract that is silent on substitution is not necessarily one considered by the Home Office to permit substitution.
(3) Identity Verification
This is carried out to ensure that the individual on whom the RTW check is being carried out is the same individual who will be providing services. The processes should be proportionate to the nature of the service being undertaken and the specific circumstances of the contractual agreement.
When do the RTW Changes Apply?
The new RTW scheme applies from 1 October 2026. The relevant date for the purposes of the extended liability provisions is the date on which the contractual arrangements are entered into. A contractual arrangement entered into before 1 October 2026 is not brought within scope solely because the work continues on or after that date.
What Actions Should Businesses Take?
Businesses should proactively undertake the following steps to ensure they are able to establish statutory excuses in the context of extended liability:
Map workforce and supply chains that are potentially affected by the new changes;
Clarify responsibility for RTW checks, where required;
Review any substitution arrangements currently in place;
Review identity verification processes for working arrangements that fall within the extended liability scope; and
Ensure new working arrangements entered into from 1 October 2026 are in line with the guidance set out above.
If you would like to discuss how the changes may affect your business, please contact our Immigration Team at contact@eversageimmigration.com.