New guidance for employers on the right to work
Employers that rely on agency staff, contractors and labour supply chains have been urged to review their right to work processes after the government published updated draft guidance ahead of major changes taking effect next year.
The Home Office has issued a revised draft code of practice on preventing illegal working, setting out how employers can establish a “statutory excuse” against civil penalties. The guidance, published on 15 July, will come into force on 1 October 2026 alongside provisions in the Border Security, Asylum and Immigration Act 2025.
The biggest change is that right to work obligations will extend beyond traditional employees to cover a much wider range of working arrangements.
Under the new framework, organisations engaging workers through individual subcontracting arrangements, contracts and online matching services will all fall within scope. The draft guidance includes examples covering temporary agency workers, delivery platform workers and cleaners engaged through online marketplaces.
However, genuinely self-employed individuals running independent businesses and contracting directly with clients for services will remain outside the regime.
The changes also introduce “extended liability”, meaning businesses higher up a labour supply chain could face civil penalties for illegal working even where they do not directly employ the individual.
Sajida Hussain, legal director in Addleshaw Goddard’s immigration team, said the reforms represented a significant expansion of employer responsibilities.
“The UK’s right to work regime is changing – and for employers operating through anything other than a directly employed workforce, the changes are significant,” she said.
“A new ‘extended liability’ concept means organisations can be exposed to penalties further up the contractual chain, rather than liability resting solely with the direct employer. In some cases, businesses may face exposure even where they do not directly employ the individual carrying out the work.”
The draft guidance also places greater emphasis on verifying that the individual carrying out the work is the same person whose right to work has been checked.
Hussain said employers should begin preparing well before the October 2026 implementation date.
“We’re already advising clients to start reviewing their right to work arrangements and commercial contracts, and clients have started putting calls in the diary with us around this ahead of October,” she said.
She added that organisations should expect greater scrutiny of labour supply chains and review contracts with agencies and labour providers to ensure appropriate right to work assurances, audit rights and controls over substitution arrangements were in place.
The changes are expected to have implications across sectors that rely heavily on contingent or flexible labour.
“This will affect all sectors – essentially any business that retains or employs staff, or has commercial contracts in place for the provision of labour. I’d expect it to hit the care and construction industries particularly hard, along with events businesses and others that run a changing workforce,” Hussain said.
She warned that the expanded obligations would increase compliance costs for employers as part of “a wider compliance and accountability push by the Home Office” aimed at strengthening immigration enforcement across labour supply chains.
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In May, immigration law specialists in the UK welcomed a U-turn on Home Office guidance requiring employers sponsoring migrant workers to conduct right-to-work checks on anyone they “directly engage”.
