From 1 October 2026, the UK’s right to work regime is expected to expand significantly beyond traditional employment relationships. Businesses may need to assess right to work compliance across a wider range of working arrangements, including freelancers, subcontractors and some platform-based workers.
For many organisations, this will not simply be an HR issue. Procurement, legal, compliance and operational teams may all need to understand where responsibility sits and whether existing processes are robust enough.
The position is still developing, and the current guidance remains in draft form. However, businesses should not wait until implementation to review their contractor and supply chain arrangements.
What is changing?
Currently, employers face civil penalties if they employ someone who does not have the right to work in the UK and have not carried out the prescribed right to work checks. A compliant check provides a statutory excuse against liability.
From October 2026, the scope of the regime will broaden. Right to work compliance will no longer be limited to straightforward employment relationships and may arise where individuals personally provide work or services through less conventional arrangements. The policy aim is to address increasingly complex labour supply models and reduce the risk of illegal working through contracting and subcontracting structures.
Which working arrangements could be affected?
The most significant extension relates to individuals engaged under a “worker’s” contract. Broadly speaking, this covers individuals who undertake to perform work personally and who are not genuinely operating an independent business serving clients or customers.
As a result, some individual freelancers, consultants and contractors may fall within the scope of the regime, depending on the nature of the arrangement. The reforms also apply to individual subcontractors and certain online matching services that connect service providers with customers through digital platforms.
The practical difficulty for businesses will be identifying where genuine self-employment ends and a worker relationship begins. That assessment is fact-sensitive and will require businesses to look beyond contractual labels, payment arrangements and how the relationship is described on paper.
Why supply chains will need closer scrutiny
One of the most important changes is the introduction of extended liability provisions. In practice, businesses may not be able to avoid right to work obligations simply because individuals are engaged through layers of subcontracting arrangements.
In some circumstances, responsibility may extend beyond the party that directly engages the individual worker. Although end users purchasing services for their own benefit are generally not intended to be caught by these provisions, organisations operating complex supply chains should review carefully how labour is sourced and where compliance responsibility sits.
This aspect of the draft guidance is likely to attract particular attention. Businesses with outsourced services, multi-tier supply chains or platform-based arrangements should monitor developments closely.
Contracts will matter, but they will not be enough on their own
The draft guidance places considerable emphasis on contractual arrangements. Businesses should review whether their contracts clearly allocate responsibility for right to work checks and contain appropriate audit, reporting and enforcement rights.
However, contractual wording alone is unlikely to provide sufficient protection. Organisations will also need practical processes to satisfy themselves that compliance obligations are being met in reality, particularly where labour is supplied through third parties.
Substitution and identity checks
Businesses should also consider arrangements where an individual is permitted to send a substitute to perform the work. Where substitution is allowed, processes will be needed to ensure any substitute is checked before work begins. Leaving this solely to the contractor may not be sufficient.
In addition, organisations will need to be prepared to verify that the individual carrying out the work is the same person whose right to work has been checked.
The draft guidance suggests a range of measures, from workplace access controls and identity cards to digital verification tools and facial recognition technology.
What are the consequences of getting this wrong?
The consequences of failing to carry out compliant right to work checks can be significant. Where an organisation is found to be employing an individual who does not have the right to work in the UK and the required checks have not been completed, it may face a civil penalty of up to £60,000 per illegal worker. In more serious cases, employers may be subject to criminal prosecution, with penalties including an unlimited fine and imprisonment of up to five years. Additional sanctions may include business closure, director disqualification and the seizure of earnings.
Practical steps to take now
Although final guidance has yet to be published, early preparation will make it easier to identify risk areas and avoid last-minute changes. Businesses should consider:
- identifying contractor, freelancer and subcontractor arrangements that may fall within scope;
- reviewing standard contracts and supply chain terms;
- considering audit and compliance monitoring procedures;
- reviewing onboarding and document retention processes; and
- training HR, procurement and operational teams on the new requirements.
If your business uses contractors, freelancers, subcontractors or platform-based labour, now is the time to review your arrangements. We can help you assess which relationships may fall within scope, update your contracts and design practical right to work compliance processes ahead of October 2026. Send an enquiry to speak with our team.
