What businesses need to know about right to work reforms

On 1 October 2026, the government introduced measures to clamp down on illegal employment – expanding responsibility for right to work checks beyond the scope of businesses’ contractual employees to encompass workers supplied under contractual arrangements in the labour supply chain.

As the onus on employers grows, so do the risks. Faced with the prospect of liability for other organisations’ failure to comply with right to work checks falling at their door, now is the time for businesses to ensure they have robust processes, protections, and evidence-retention procedures in place.

The background: Putting the upcoming right to work reforms into context

The latest series of right to work reforms form part of the phased implementation of the Border Security, Asylum and Immigration Act 2025, which passed into law on 2 December 2025.

From mitigating unlawful migration and bolstering border security to ushering in stronger enforcement measures, the Act is intended to strengthen immigration control, border security, and enforcement measures – including by extending parts of the illegal working regime.

Following a series of changes earlier in the year, Section 48 of the Act – which extends liability for right to work checks beyond direct employees – came into force on 1 October 2026. The Home Office has published draft employer guidance for the expanded right to work scheme, which you can read more about here.

The changes have echoes of the recent revisions to umbrella company tax rules introduced in April 2026. Under the new regime, end users and agencies could potentially be deemed jointly and severally liable for an umbrella company defaulting on its tax and National Insurance contributions. You can read more on those changes here.

The breakdown: Right to work reforms at a glance

Under the previous regime, organisations were required to undertake pre-employment right to work checks on people they are planning to employ before they could start work. So, if a business engaged a worker supplied by an intermediary body such as an agency or contractor, responsibility for the pre-employment checks lay with the organisation that directly employed the worker in question (in this case, the agency or contractor).

As of 1 October 2026, liability for right to work checks extends beyond the scope of directly-contracted employees to encompass certain non-direct contractual arrangements.

In theory, this means that, if a worker is supplied to a business by another organisation in the labour supply chain, and that intermediary organisation defaults on their due diligence checks, the business receiving the labour may need to demonstrate that a compliant right to work check has been carried out – and, in the event of non-compliance, could find the consequences falling at their door.

The precise impact in practice will depend on the working arrangements, contractual chain, and whether the arrangement falls within scope of the Home Office guidance.

The bottom line: What businesses should be thinking about now

From construction projects, outsourced services and facilities contracts to some agency, subcontracting, and umbrella company arrangements, the reforms present pertinent considerations for businesses using labour supplied by third parties.

We asked Immigration expert Samia Yaqub  what the implementation of the right to work checks could look like in practice, the potential ramifications for businesses, and the considerations employers should start addressing their minds to in light of the reforms.

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Here’s a snippet of what Samia had to say: 

‘This is not just a HR or immigration update. It is likely to affect how businesses manage labour supply chains, outsourcing, subcontracting and wider workforce risk.

‘The key takeaway is that immigration compliance is increasingly becoming a commercial and governance issue rather than simply an employment issue.

‘For many businesses, the risk will not be limited to whether they have checked the right to work of their own employees. The more difficult question may be whether they understand who is performing work further down the supply chain, whether contractual protections are adequate, and whether they have enough oversight to evidence compliance if challenged.

‘Businesses should start by assessing their working arrangements and mapping where individuals are working for them but are not directly employed by them. They should then review contracts, supplier onboarding, audit rights, indemnities, information-sharing processes, escalation procedures, evidence-retention arrangements and record keeping. Training will also be important so that procurement, HR, legal and operational teams understand when right to work compliance needs to be considered.’

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Looking to prepare and need a helping hand?

With cross-disciplinary corporate, employment, and immigration expertise under one roof, there’s plenty we can do to help you prepare for what’s on the horizon.

Get in touch to find out more.

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Frequently asked questions

What are right to work checks – and how do they work?

First introduced in 2008, right to work checks are compulsory, pre-employment checks that employers must carry out on a worker they are planning to engage before employment starts.

Where required, checks may also be undertaken during employment to confirm that the worker is permitted to carry out the work in question in the UK. Follow-up checks may also be completed to establish, and where necessary maintain, a statutory excuse against liability for a civil penalty if the individual is later found to be working illegally.

The purpose of the checks is to verify that a prospective employee is legally entitled to work in the UK – such as by holding a Skilled Worker visa, having settled status, or being granted Indefinite Leave to Remain.

In 2024, the government phased out physical right to work checks – moving away from biometric residence permits in favour of a fully online eVisa system. Manual document checks remain available only where the guidance permits them, including for British and Irish citizens relying on eligible documents.

Previously, employers were only liable to complete right to work checks on workers directly contracted by them – but on 1 October 2026 the scheme was expanded to encompass to certain non-direct contractual arrangements.

In what ways have right to work checks changed?

On 1 October 2026, changes were ushered in under Section 48 of the Border Security, Asylum, and Immigration Act 2025 which saw liability for right to work checks expand to certain arrangements across the labour supply chain. Under the new regime, if a business engages a worker supplied by a third party organisation, and the third party organisation falters in their obligation to complete the necessary right to work checks, the business may need to demonstrate that a compliant right to work check has been carried out on the worker(s) supplied to them.

Not all commercial relationships will automatically be caught, but businesses should assess their labour supply arrangements and avoid relying on the direct employer to manage right to work compliance.

Who could the right to work reforms affect?

The changes to right to work checks could affect businesses using workers supplied through third-party labour arrangements, including some contractor, subcontractor, agency, facilities, outsourcing and umbrella company models.

Each arrangement should be assessed on its facts, including the contractual structure, who supplies the labour, who receives or benefits from the work, whether the arrangement is within scope of the expanded scheme, and whether the final guidance contains any transitional provisions for existing arrangements.

What risks could the new right to work checks pose for employers?

As the scope of liability for right to work checks expands, businesses will not only be responsible for verifying their own direct employees’ right to work – but will also be reliant on third parties they contract with performing proper due diligence checks on workers supplied to them.

As such, whether or not businesses are deemed compliant may no longer be fully in their control – and businesses will need to ensure that they can evidence that an appropriate compliance process has been followed for any in-scope non-direct contractual arrangements.

Failure to comply can carry significant consequences – including reputational risk, contractual disputes, wider compliance scrutiny civil penalty notices and fines of up to £60,000 per illegal employee.

What steps can employers take to prepare for the new right-to-work checks?

From auditing contracts and assessing labour supply chains to implementing training and conducting stringent due diligence on suppliers, now is the time for businesses to start taking steps to ensure they’re protected.

Employers should also review the final Home Office guidance and code of practice to ensure they’re up-to-date with the latest information.

Our experts are equipped to provide legal advice on all these issues and more.

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INSIGHTS DISCLAIMER

Please be advised that this is an update which we think may be of general interest to our wider client base. The insights are not intended to be exhaustive or targeted at specific sectors as such, and whilst we naturally take every care in putting our articles together, they should not be considered a substitute for obtaining proper legal advice on key issues which your business may face.