The current position
At present, businesses risk a civil penalty if they employ someone who does not have the right to work in the UK. A compliant right to work check provides a statutory excuse against that penalty provided that it is carried out in line with Home Office guidance.
The three recognised ways of carrying out right to work checks are as follows:
- Manual document check
- Home Office online right to work check (share code)
- Right to work check via a Digital Verification Service Provider (DVSP) check
The maximum civil penalty for illegal working is up to £60,000 per illegal worker if a company is found to be employing someone without the requisite visa permission and they have not carried out a compliant right to work check. The key change is that, from 1 October 2026, the regime will apply not only to individuals in an employment relationships, but also people who, in certain circumstances, are personally engaged to provide work or services.
Which working arrangements are affected?
The key piece of legislation is s48 of the Border Security, Asylum and Immigration Act 2025 which amends the definition of 'employment' in the Immigration, Asylum and Nationality Act 2006 (IANA 2006). This piece of legislation sets out the statutory framework for the modern day civil penalty regime. The new provisions extend the definition of 'employment' under the IANA 2006 to other working relationships. This is set out in further detail below.
1. Worker’s contracts
The legislation introduces a requirement to carry out a right to work check for individuals engaged under a “worker’s contract”. This definition appears to be closely modelled on the concept of a worker in section 230(3) of the Employment Rights Act 1996. In broad terms, the concept of a 'worker's contract' covers arrangements that sit between 'employment' and 'self-employment' and arise where:
- An individual undertakes to perform work or services personally
- The recipient is not a client or customer of the individual’s own business
The guidance makes clear that individuals who are genuinely self-employed, operating their own business either in their own name or through their own company and who contract direct with clients are not within the scope of the right to work scheme.
Example
Possible worker’s contract
- XYZ Ltd engages Emma directly to provide consultancy services
- Emma is required to perform the work personally
- She works primarily for XYZ Ltd and is not operating an established consultancy business with multiple clients
✓ This is likely to be a worker's contract, provided XYZ Ltd is not a client or customer of Emma's profession or business (see further below).
Likely outside the regime
- XYZ Ltd contracts with CleanCo Ltd to provide office cleaning services
- CleanCo can send whichever employees it chooses
- XYZ Ltd has no contract with the individual cleaners
✗In that scenario, XYZ Ltd's contract with CleanCo Ltd is a business to business arrangement for the supply of services, not a worker's contract. However, CleanCo Ltd would normally be responsible for carrying out right to work checks on its own staff.
Worker or genuinely self-employed?
Employers are therefore going to have to make some important decisions as to whether individuals are 'workers' or 'self-employed', as engaging the former will now require a right to work check. To assist with this, the draft guidance provides examples of individuals who would be considered as self-employed and therefore outside the remit of the scheme. For instance, those who:
- Advertise their services to the public
- Maintain their own client base
- Work for multiple customers
- Invoice clients directly
However, it does not directly address more nuanced scenarios which are going to be harder for an employer to negotiate. Ambiguous and difficult cases are going to need a broader assessment of the arrangement in place and the circumstances of the employer and the individual involved. At this point, employment case law on worker status is likely to be instructive. This gives the following non-exhaustive factors as potentially indicative of self-employment or worker status;
- Whether the individual must provide the services personally
- Which would indicate worker status
- Whether there is a genuine unfettered right of substitution
- Which would indicate self-employment
- Whether the individual is marketing their services to the wider market
- Which would indicate self-employment
- The degree of control or direction exercised by the hirer
- A high degree of control would indicate worker status
- Whether the individual bears financial risk
- Which would indicate self-employment
- Whether they appear to customers as an integral part of the hirer’s business
- Which would indicate worker status
Employers will need to assess closely the working relationships that they have within their organisations and businesses to see whether there are individuals who are on a 'worker's contract'. If so they may in the future come within the prevention of illegal working regime.
Where there is uncertainty, the simple solution would be to carry out right to work checks on all directly engaged freelancers and consultants in case they could be construed to be engaged via a worker's contract. This would reduce the risk of possible civil penalties if illegal working was to be found. However, the risk is that this introduces an element of 'control' between the hirer and the purported self-employed individual. This could later be relied on to support an argument that worker status exists for the purposes of statutory employment rights.
This risk could be lowered by making clear in the service agreement or contract that the right to work check is being carried out purely for regulatory reasons, to ensure there is no risk of a civil penalty from illegal working. The contract should be explicit that the parties agree that the individual contractor is not considered to be a worker for the purposes of employment law. This approach is not, however, foolproof. Employment case law indicates that a tribunal will look at the reality of the situation in practice to determine worker status rather than basing their decision entirely on the wording in a contract or agreement.
2. Individual subcontractors
The second category of working relationship to come within the prevention of illegal working regime is individual subcontractors. This covers the situations where a self-employed person is hired by a main contractor to carry out a specific part of a larger project. Sub-contracting arrangements are common in sectors such as construction where there are often multiple layers of contracting governing the workers on a site so it is difficult to identify who is ultimately responsible for carrying out right to work checks.
The party that directly engages the individual subcontractor is likely to be the one that needs to ensure a compliant right to work check is carried out. For instance this would include where:
- Property owner engages Main Contractor
- Main Contractor engages Electrical Ltd
- Electrical Ltd engages individual electricians to perform the work
In that scenario, Electrical Ltd is the party most likely to be responsible for the electricians’ right to work checks. The property owner is simply purchasing construction services as the end user. The Main Contractor may be responsible for carrying out right to work checks (or liable for a civil penalty if they have not complied with the prescribed requirements - see below) via the extended liability provisions.
3. Online matching services
The final working relationship is individuals engaged via an online matching service such as Task Rabbit. This is aimed at gig-economy style businesses that:
- Maintain a register of service providers
- Match them with customers through an online platform
- Charge a fee or commission for doing so
The draft guidance suggests that it will be the platform operator, rather than the end customer, who may be treated as the responsible party for right to work purposes. For example, a customer booking a cleaner through an app would not normally be expected to carry out a right to work check, this would be the responsibility of the platform.
Extended liability through supply chains
One of the most significant changes introduced by the new legislation is the extended liability provisions. This means that an employer could be fined for illegal working committed by a worker who is not directly employed or engaged by them, such as someone supplied through a subcontractor. The provisions are designed to prevent businesses from avoiding right to work responsibilities by supplying workers through a chain of contractors, agencies, or substitution arrangements.
The draft guidance makes clear that end users of a service are not generally intended to be treated as employers merely because an individual ultimately performs work for their benefit. This means that individuals or businesses who are the receiver of the service will not be liable for a civil penalty if the workers providing this service do not have the requisite visa permission to live and work in the UK.
Extended liability will likely apply in the following circumstances;
- Subcontracting - where a person is under a contract to provide work or services to a third party and enters into a contract with another employer who employs the workers to carry out all or part of the work or services required to fulfil that contract
- Online Matching - where an online matching service matches a service provider with a client or customer to provide work or services, and the service provider enters into a contract with the client or customer
- Substitution - where an employer employs an individual to provide work or services, and the contract permits that individual to provide a substitute to carry out the work or services in their place
How does a business gain a statutory excuse from a civil penalty in the event of extended liability?
The Home Office recognises that, in a long supply chain, businesses may not have direct contact with every worker in that chain to be able to carry out right to work checks. There is therefore a mechanism to provide protection from a possible fine.
This mechanism works by requiring a 'written statement' to be included in the relevant contracts to make clear who is responsible for carrying out right to work checks. If the arrangements satisfy the Home Office requirements, the party with the legal responsibility for checking right to work can rely on those contractual arrangements to establish a statutory excuse, in the event that illegal working arises.
The written statement must include provisions requiring the relevant employer or service provider to:
- Conduct prescribed right to work checks on any individual employed to perform the relevant work or services
- Not further subcontract the work or services without the prior written consent of the person or the online matching service and replicate equivalent right to work obligations in any permitted subcontracting arrangements
- Permit the person or the online matching service to conduct audits of the employer or the service provider’s compliance with prescribed right to work checks
- Enable the person or the online matching service to take enforcement action against the employer or the service provider where illegal working is identified
- Require the employer or the service provider to co-operate with any Home Office investigation relating to illegal working
The inclusion of these provisions in contracts is not sufficient on its own - the guidance requires a person or business to take reasonable and proportionate steps to satisfy themselves that the requirements are being met in practice for instance by getting confirmation that checks have in fact been carried out, reviewing sample records, requiring regular compliance info from employers/service providers, and carrying out audits.
Substitution arrangements
The draft guidance contains specific provisions to manage contractor substitution. This arises where a hired worker is allowed under contract to send another person to do their work. The Home Office wants these arrangements to come with some responsibility on the parties to ensure that the substitute has the requisite visa permission to work in the UK.
Where a contract allows an individual to send someone else to perform the work, a business will only obtain a statutory excuse if it ensures that:
- Any substitute undergoes a compliant right to work check before starting work
- Responsibility for the check is not left to the contractor personally
- The business has appropriate contractual remedies if illegal working is identified
Identity verification
The draft guidance also emphasises the need for proportionate systems to confirm that the person who is performing the work is the same person whose right to work was checked. The guidance suggests possible measures that can be used including;
- Workplace ID passes
- Attendance or biometric systems
- Facial verification technology
- Verification against training records or licences
- Periodic re-verification where appropriate
The guidance does not require every business to implement sophisticated biometric systems, but it does expect reasonable processes that are proportionate to the nature of the working arrangement and any outsourcing or supply-chain risks.
What about PSC contractors and IR35?
The draft guidance indicates that a client engaging an individual through that individual’s personal service company (PSC) is generally entering into a business-to-business (B2B) services arrangement.
Where the PSC is genuinely providing the services and the arrangement is properly structured as a B2B engagement, the client would not normally be required to carry out a right to work check on the individual contractor.
This is broadly consistent with arrangements that are genuinely outside IR35, although businesses should continue to assess employment-status and IR35 issues separately and seek specialist tax advice where necessary.
When must checks be carried out?
The draft guidance is clear that the new regime is intended to apply to right to work checks carried out from 1 October 2026. They key principle is that the relevant check must be completed before the individual starts work or begins providing services under the contractual arrangement. Existing contractual arrangements that are underway therefore do not have to be revisited. Any working arrangements finalised after 1st October 2026 will, though, come under these provisions.
A remaining area of uncertainty is intermittent freelance engagements. If a contractor performs a short piece of work, there is a long gap, and they are later re-engaged, the draft guidance does not clearly state whether the original check remains sufficient or whether a fresh check will be required for the new engagement. Further clarification from the Home Office on that point would be welcome, but in the meantime the cautious approach would be to carry out a re-check in these circumstances.
Next steps
Although the final guidance is still to be published, employers should begin preparing for the new measures before they come into force on 1 October 2026.
- As a first step, organisations should map all non-traditional labour arrangements, including freelancers, consultants, contractors engaged personally, subcontractors, agency workers, and any workers sourced through online platforms
- Organisations should then review existing contracts to identify personal service obligations, substitution clauses, and gaps in right to work compliance provisions
- Businesses that operate through supply chains should consider introducing written right to work obligations, audit rights, and reporting requirements into their standard terms and procurement documents
- HR, procurement, and operational teams should also be trained to spot arrangements that may fall within the new “worker’s contract” definition, and a clear internal process should be established for deciding when a right to work check is required, who is responsible for carrying it out, and how evidence will be retained
These changes represent one of the most significant expansions of the UK’s prevention of illegal working regime since the civil penalty system was introduced. By extending right to work responsibilities into areas such as freelance engagements, subcontracting chains, and platform-based labour models, the Home Office is signalling a clear expectation that businesses take a more proactive and structured approach to workforce compliance. Although some practical questions remain, organisations that review their labour supply arrangements and contractual terms now will be far better placed to manage both immigration risk and operational disruption when the new regime takes effect.
We will be discussing these changes along with input from a member of our employment team at our webinar on 8 September 2026 - Sign up here if you would like to attend.
