Right to Work Duties Expanded in Sponsor Guidance
Recent updates to Home Office sponsor guidance in March and April 2026 have changed sponsor licence holders’ right to work responsibilities.
While the underlying statutory framework under the Immigration, Asylum and Nationality Act 2006 has not been amended, (as yet at least), the sponsor guidance now extends beyond the previous, traditional focus on employees and sponsored workers.
1. March and April 2026 sponsor guidance changes
On 6 March 2026, the official sponsor guidance was amended to extend compliance expectations to include right to work checks for individuals “engaged” by the sponsor. No definition was provided, which created immediate uncertainty as to how far the requirement extended beyond employees.
Further updates on 8 April 2026 introduced the wording “directly engaged” in an attempt to narrow the scope.
The revised guidance indicates that sponsors are expected to assess whether right to work checks are required for individuals they directly engage, including those who are not employees, and to be able to justify that approach.
2. Statutory framework remains unchanged
Illegal working legislation continues to require employers to carry out right to work checks before employment begins in order to establish a statutory excuse. The statutory excuse provides protection against civil penalties where an individual is later found to be working without permission.
The legislation has not been extended to cover all forms of engagement. The obligation to obtain a statutory excuse remains tied primarily to employment and comparable working arrangements under the illegal working regime. There is no equivalent statutory excuse mechanism designed for non-employment engagements.
Sponsors therefore need to operate within two parallel frameworks, one grounded in legislation and the other set out in sponsor guidance.
3. Issues with the Updated Guidance
The March and April 2026 changes are likely to be problematic for sponsors for a number of reasons.
First, the guidance now goes further than the legislation. The Home Office has expanded compliance expectations through sponsor guidance, without making corresponding changes to the illegal working regime. The statutory framework still limits the obligation to carry out right to work checks to employment relationships, but sponsor duties now extend beyond that. Sponsors are therefore required to operate within a dual framework. One is a narrow legal obligation tied to statutory excuse, while the other is a broader compliance expectation enforced through the sponsor licence regime. That mismatch creates uncertainty as to what standard is ultimately being applied in an audit or enforcement scenario.
Second, the concept of “direct engagement” remains undefined. This is where the practical difficulty becomes most acute. Employers are expected to determine whether an individual falls within scope of the guidance without any clear test or boundary. Distinguishing between employment, direct engagement and genuinely outsourced arrangements is not always straightforward, particularly where modern workforce models involve consultants, contractors and hybrid working structures. Without a clear definition, different organisations will reach different conclusions on similar facts, which increases the risk of inconsistent compliance.
Third, the consequences of getting this wrong are significantly higher than under the statutory regime alone. The updated guidance links failures in right to work processes, or an incorrect interpretation of the rules, directly to sponsor licence action. That includes the possibility of suspension or revocation. Civil penalty exposure under the illegal working regime is already significant, but licence revocation carries wider operational consequences, including the loss of the ability to sponsor workers and disruption to existing sponsored staff. The shift in enforcement focus therefore elevates what was previously a technical compliance issue into a core business risk.
Clarity therefore eludes the official sources, with different parts of the guidance use inconsistent language, meaning there is no clear boundary between employment, engagement and outsourcing. The result of this lack of definition is now driving compliance risk rather than resolving it.
Practical Implications for Sponsors
The updated guidance impacts how the Home Office expects sponsors to operate in compliance terms. Sponsors are now expected, on the face of the guidance, to:
- Carry out right to work checks on all employees, not only sponsored workers
- Check all sponsored workers, including those working under secondment or similar arrangements
- Assess right to work status for individuals they “directly engage”, even where no employment relationship exists
This goes further than the traditional framework, where the statutory excuse only applies to employees and where checks for non-employees were not required in the same way. The updated guidance effectively creates a compliance expectation that is wider than the statutory protection available to employers.
At the same time, compliance visit guidance continues to suggest that checks for non-sponsored workers are not mandatory, creating an inconsistency in how obligations are described across different Home Office materials.
In practical terms then, sponsor right to work duties apply as follows, reflecting different types of workers and arrangements:
| Category | RTW check required? | Statutory excuse? | Sponsor duty risk? |
|---|---|---|---|
| Sponsored worker | Yes | Yes, where an employment relationship exists | Yes, core duty |
| Employee | Yes | Yes | Yes |
| Directly engaged individual | Yes, as set out in guidance | Usually no | Yes, emerging risk area |
| Agency or indirect worker | Unclear | Usually no | Depends on structure |
1. Right to work checks & sponsored workers
Right to work checks for sponsored workers remain a core sponsor duty and the position has not changed in substance following the March and April 2026 updates. Sponsors are required to carry out a compliant check before the individual starts work and retain evidence in line with Appendix D record keeping duties.
The obligation applies regardless of how the individual is engaged. Where a sponsored worker is assigned to the organisation under a secondment or similar arrangement, the sponsor is still responsible for ensuring the individual has the right to work and that evidence of that check is held.
Home Office compliance activity continues to focus heavily on this area. Failures relating to sponsored workers remain one of the most common triggers for enforcement action.
2. Right to work checks & employees who are not sponsored
Employers are required to carry out right to work checks on all employees in order to establish a statutory excuse. The March and April 2026 guidance updates have not altered this legal position.
The requirement applies across the workforce, including British citizens and individuals with settled status. A compliant check carried out before employment begins provides protection against a civil penalty if the individual is later found to be working without permission.
The statutory excuse regime continues to operate as the primary safeguard within the illegal working framework and remains separate from wider sponsor compliance duties.
3. Right to work checks & individuals directly engaged by the sponsor
The updated guidance introduces a broader expectation that sponsors carry out right to work checks where they engage individuals directly, even where no employment relationship exists. This represents the most significant expansion in scope.
Direct engagement is not defined in the guidance. In practice, the concept is likely to cover arrangements where an individual provides services in their personal capacity under a contract with the organisation such as consultants engaged directly and individual contractors engaged in a personal capacity.
Some gig-style arrangements may also fall within scope where the contractual relationship is with the individual rather than a separate business entity. Each arrangement needs to be assessed on its facts.
These expectations extend beyond the statutory excuse regime. A right to work check in this context is driven by sponsor compliance rather than a requirement under illegal working legislation.
4. Right to work checks & individuals not directly engaged
The current drafting indicates that individuals who are not directly engaged by the sponsor fall outside the expanded scope. This would generally include agency workers supplied by a third party, outsourced service providers operating on a genuine business-to-business basis, and subcontractors with their own workforce.
Where individuals are supplied through a third party, responsibility for right to work checks would ordinarily sit with that supplier. Agency workers and outsourced service providers are therefore less likely to fall within the sponsor’s direct responsibility.
The position is not absolute. Where the contractual structure does not reflect the reality of the working arrangement, or where the sponsor exercises a high degree of control, the Home Office may take a different view. Careful assessment of each arrangement is required rather than reliance on labels.
Sponsors should assess each arrangement carefully and avoid relying solely on labels such as “contractor” or “outsourced”. The absence of a clear boundary means that this remains an area of elevated compliance risk.
Penalties for Non-Compliance
Sponsors remain subject to enforcement action should they be found to be in breach of their compliance obligations, both under the sponsorship and right to work regimes.
The March and April 2026 updates have effectively delineated the statutory excuse regime and sponsor compliance obligations. The statutory framework remains rooted in employment law principles and continues to provide protection against civil penalties where a compliant right to work check has been carried out. Sponsor duties now extend beyond that framework, reaching a wider group of individuals and operating on a different enforcement basis.
An organisation can meet the statutory excuse requirements for its employees and still fall short of sponsor expectations. Where that happens, the risk does not sit with civil penalties but with sponsor licence action. Suspension and revocation are now firmly in scope where the Home Office considers that right to work compliance has not been applied appropriately across the workforce.
The obligation to carry out right to work checks on employees remains unchanged. Checks need to be completed before employment begins and applied consistently across all employees, including British and settled workers. Failure to carry out a compliant check removes the statutory excuse and exposes the organisation to civil penalty risk if illegal working is identified.
The more significant development lies in how the Home Office is now framing sponsor licence risk. The guidance indicates a broader interpretation of compliance failures that may lead to licence action in situations where a sponsor is found to be employing or engaging an individual who does not have the right to work. That approach is not limited to sponsored workers and reflects the broader scope introduced through the updated guidance.
Linkage to the statutory excuse is no longer the central issue in this context. A sponsor may have followed the prescribed right to work checking process for employees and still face licence action if the Home Office takes the view that wider engagement practices have not been compliant. The focus has shifted towards whether the organisation’s systems adequately address right to work risk across all relevant categories of worker.
Under the guidance, revocation is a common outcome in cases where illegal working is identified within the sponsor’s operations, although discretion remains depending on the circumstances and the sponsor’s compliance framework.
The overall effect is a higher risk threshold for sponsors. Compliance expectations have expanded, while the statutory protection available to employers has not been extended in parallel. Right to work compliance is now as much about the robustness of internal systems and workforce oversight as it is about completing individual checks correctly.
What Sponsors Should Do Now
The updated guidance has clearly resulted in greater compliance risk for sponsors, specifically in relation to how the rules are interpreted and then applied across an organisation.
The absence of a clear definition of “direct engagement” means different parts of the business may adopt different approaches, particularly where contractor, consultancy and secondment models are used. That inconsistency is where exposure begins to build.
Risk increases where the Home Office takes a broader view during an audit than the organisation has applied internally. That gap is difficult to defend, especially where the guidance itself lacks precision and leaves room for interpretation. Sponsor compliance has always been assessed by reference to systems as well as outcomes, and the recent updates reinforce that approach.
Right to work compliance should now be viewed through the lens of the wider workforce model. Checks are still required for all employees and sponsored workers as a baseline. The focus has shifted to whether additional categories of individuals fall within scope because of how they are engaged in practice.
Particular care is needed where individuals are integrated into the organisation in a way that goes beyond a purely external or arms-length arrangement. Contractor relationships that are regular or embedded, secondees working within the business but employed elsewhere, and arrangements involving intermediaries where there is a degree of control or supervision all require closer assessment. The dividing line is not clearly drawn, which means each arrangement needs to be considered on its facts.
More remote or incidental relationships are less likely to fall within scope, but should not be assumed to sit outside it without review. A case-by-case assessment is required, with the rationale for each decision clearly recorded.
Sponsors should review their right to work processes with a focus on consistency and coverage. Existing procedures should be tested against the updated guidance to determine whether they extend beyond employees and sponsored workers where appropriate. The emphasis should be on aligning practice with how individuals are actually engaged, rather than how they are described contractually.
Additional scrutiny is needed for arrangements that sit outside standard employment structures. Where checks are carried out, records should be retained in line with Appendix D. Where checks are not carried out, the decision and supporting reasoning should be documented. That evidence may be critical if the organisation’s approach is later examined.
Internal understanding is now a key part of compliance. Hiring managers and operational teams need to recognise the difference between employment, direct engagement and outsourced provision, and apply a consistent approach across the organisation. Without that alignment, even well-designed policies can fail in practice.
Pending further clarification or legislative change, a cautious and evidence-led approach is advisable. Sponsors that can demonstrate a considered methodology for identifying who falls within scope, and how right to work compliance is applied in each case, will be better placed to respond to Home Office scrutiny.
DMS Perspective
With no clear definitions and inconsistent drafting, the revised guidance does create an operational gap that will be challenging for many sponsors to apply in practice.
We can only hope that further clarification from the Home Office will come, but in the meantime, if you are concerned about your organisation’s compliance under this new guidance, contact us for specialist, tailored advice. Our team of UK sponsorship compliance experts work closely with colleagues specialising in HR and employment law to offer a comprehensive support and advisory service for sponsor licence holders.
Need Assistance?
If your organisation holds a sponsor licence, these changes warrant immediate review. The updated guidance affects how right to work checks should be applied across your entire workforce model, not only your sponsored population.
Where you engage contractors, consultants or operate mixed engagement structures, a gap analysis against current Home Office expectations can identify areas of exposure before they become enforcement issues. Internal processes, documentation and decision-making frameworks all need to stand up to scrutiny.
We are advising sponsors on how to interpret and apply the 2026 changes in practice, including reviewing workforce arrangements, updating compliance procedures and preparing for Home Office audit. If you would like a clear view of your current risk position, get in touch.
