UK Right to Work Changes from 1 October 2026
On 1 October 2026, the UK’s right to work regime undergoes its most significant expansion for many years. The new framework extends immigration compliance obligations beyond traditional employment relationships to encompass a wider range of modern labour arrangements, reflecting the way organisations increasingly source workers through contractors, subcontractors and other non-traditional engagement models.
The changes are introduced by section 48 of the Border Security, Asylum and Immigration Act 2025, which expands the definition of “employer” for the purposes of the illegal working regime rather than employment law generally.
Although employers will continue to establish a statutory excuse using the existing Home Office checking routes, the organisations falling within scope of the legislation will broaden. Consequently, immigration compliance is no longer solely an HR or recruitment issue. Procurement teams, commercial managers and those responsible for outsourcing or engaging contingent labour may also need to review existing practices before the reforms take effect.
One of the more notable aspects of the new regime is what has not changed. Despite earlier consultation proposals, the final Home Office Code of Practice does not create a separate legal category for agency workers, does not make Digital Verification Service Providers (DVSPs) mandatory and does not introduce wider personal liability for company directors. Employers relying on consultation papers or secondary commentary may therefore be working from an inaccurate understanding of the final legislation.
The civil penalty regime also remains unchanged. Employers that fail to establish a statutory excuse continue to face civil penalties, including fines of up to £60,000 per illegal worker for repeat breaches. Instead, the focus of the October reforms is on expanding the reach of the illegal working regime into specified labour arrangements and clarifying where responsibility for compliance sits under the statutory framework.
For many organisations, the immediate priority is unlikely to be changing how right to work checks are carried out. The greater challenge is identifying where existing contractor, outsourcing and labour supply arrangements fall within the scope of the new rules and ensuring responsibility for compliance is clearly understood before 1 October.
Licensed sponsors should also recognise that an illegal working civil penalty can have wider consequences, including Home Office action against an existing sponsor licence and increased scrutiny of future immigration applications.
| Current position | From 1 October 2026 |
|---|---|
| Right to work duties focus primarily on traditional employment relationships. | The regime extends to specified wider working arrangements defined in the legislation. |
| Manual checks, Home Office online checks and eligible digital verification routes establish a statutory excuse. | The recognised checking routes remain unchanged. |
| Civil penalties apply where a statutory excuse cannot be established. | Existing penalty levels remain, including fines of up to £60,000 per illegal worker for repeat breaches. |
| Right to work compliance is commonly managed by HR and recruitment teams. | Contractor engagement, procurement and outsourcing arrangements should also be reviewed. |
Who Will Be Most Affected by the New Rules?
The October reforms will not affect every employer to the same extent. Organisations that recruit staff directly under conventional contracts of employment and already operate compliant right to work procedures may need to make relatively few operational changes. The greatest impact is likely to be felt by businesses that source labour through more complex contractual arrangements or engage individuals outside a traditional employment relationship.
The Home Office’s starting point remains that responsibility sits with the organisation that has the direct contractual relationship with the individual. Where that employer cannot be identified, or the prescribed compliance requirements have not been met, responsibility may instead extend to another organisation within the contractual arrangements. Understanding where those circumstances arise is likely to become one of the most important aspects of right to work compliance after 1 October.
That is because the legislation extends the scope of the illegal working regime into specified working arrangements that have become increasingly common across many sectors. Construction, logistics, hospitality, social care, facilities management, retail, technology and the gig economy are among the industries most likely to encounter the new rules in practice, although the reforms are not sector specific.
Businesses that should review their arrangements now
Priority should be given to organisations that:
- engage self-employed individuals or workers under worker contracts
- outsource services to third-party providers
- operate subcontracting models
- source labour through online matching platforms
- use layered contractual arrangements to deliver services
None of these arrangements automatically create liability. The final Home Office Code of Practice allocates responsibility according to the statutory framework and the contractual relationships between the parties. That represents an important departure from some early commentary, which suggested the reforms would impose blanket liability throughout labour supply chains.
Review procurement as well as recruitment
One of the practical consequences of the reforms is that right to work compliance can no longer sit exclusively within HR. Procurement, legal and commercial teams may also need to become involved where organisations procure outsourced services or engage labour through third parties. Existing contracts should be reviewed to establish who is responsible for carrying out right to work checks, how compliance will be evidenced and what audit rights exist if the Home Office requests evidence.
For many employers, October will not require a new right to work process. It will require a clearer understanding of who is responsible for compliance across the organisation’s labour supply arrangements and where contractual responsibilities begin and end.
How to Prepare for 1 October 2026 Right to Work Changes
Although the new regime does not come into force until 1 October, employers should not wait until the autumn to assess its impact. The reforms may require changes that extend well beyond HR procedures, particularly where labour is sourced through contractors, outsourced service providers or more complex commercial arrangements. Early preparation will allow time to review existing processes, update contracts and address any gaps before the new rules apply.
October 2026 Employer Checklist
| Action | Reason |
|---|---|
| Map all labour engagement models. | Identify where workers are engaged outside traditional employment arrangements. |
| Review agency, contractor and subcontractor agreements. | Confirm contracts reflect the new right to work compliance framework. |
| Identify who is responsible for compliance. | Ensure contractual responsibility is clearly allocated across labour supply arrangements. |
| Review contractual protections. | Check warranties, audit rights, evidence-sharing obligations and cooperation provisions are appropriate. |
| Assess substitution and identity verification processes. | Confirm suitable controls exist where substitutes may perform work and identities need to be verified. |
| Update internal procedures. | Review recruitment, procurement, onboarding and supplier management processes. |
| Train relevant teams. | Ensure HR, procurement, operational, legal and contract management teams understand the new requirements. |
| Complete implementation before 1 October 2026. | Reduce the risk of civil penalties and wider immigration compliance issues when the reforms take effect. |
Identify where labour is engaged
The first step is understanding how labour enters the organisation. Recruitment teams are unlikely to have visibility of every engagement model, particularly where individuals are sourced through procurement, operations or individual business units. Employers should map the different ways work is performed across the business, identifying where services are outsourced, subcontracted or supplied through third parties.
Review contractual responsibility
The October reforms do not impose automatic liability throughout a labour supply chain. Responsibility depends on the statutory framework and the contractual relationships between the parties. Existing agreements should therefore be reviewed to establish who is responsible for carrying out right to work checks, retaining evidence and responding if the Home Office requests proof that compliant checks have been completed.
Review substitution arrangements
Businesses that engage individuals under contracts allowing substitution should review how those arrangements operate in practice. Where another individual is permitted to perform the work, appropriate processes should be in place to ensure the substitute’s identity and right to work are verified before work begins. Contractual clauses that exist on paper but are not supported by operational controls may create unnecessary compliance risk.
Strengthen identity verification processes
The Code also introduces a greater focus on ensuring the individual carrying out the work is the same person whose right to work has been verified. Existing identity verification procedures, site access controls and attendance systems should therefore be reviewed where businesses engage workers through more complex contractual arrangements.
Understand how a statutory excuse is established
The greatest operational change for many businesses will not be who they check, but how they demonstrate compliance where wider labour arrangements fall within the new regime. While the existing right to work checking methods remain available, organisations relying on more complex contractual arrangements may also need to satisfy additional prescribed requirements to establish a statutory excuse against civil penalty liability.
Depending on the working arrangement, those requirements may include written contractual warranties, appropriate audit rights, cooperation with Home Office investigations, identity verification processes and controls around substitution. Businesses should review existing contractual documentation well before October to establish whether those safeguards are already in place.
Strengthen governance and record keeping
Organisations should also review internal governance arrangements. Policies and onboarding procedures may already be compliant for employees, but they may not adequately address wider labour engagement models. Internal ownership should be clearly defined, with appropriate reporting lines between HR, procurement, legal and operational teams where responsibilities overlap.
Review contractual protections
Organisations relying on agencies, subcontractors or outsourced labour providers should review existing contractual documentation before October. The final Code places greater emphasis on written contractual protections where businesses seek to establish a statutory excuse under the expanded regime.
Depending on the arrangement, contracts may need to address right to work compliance obligations, evidence sharing, audit rights, notification requirements, cooperation with Home Office investigations and appropriate enforcement provisions where non-compliance is identified. Existing agreements should not be assumed to satisfy the new framework without review.
Train the right people
Training should extend beyond recruitment teams. Managers responsible for engaging contractors, commissioning outsourced services or approving labour supply arrangements should understand when the new rules may apply and when specialist advice should be sought. Immigration compliance increasingly forms part of wider workforce governance rather than a standalone recruitment function.
DMS Perspective
Organisations preparing for the changes will quickly realise that immigration compliance is no longer confined to recruitment or HR alone. The October 2026 reforms effectively extend the right to work regime beyond recruitment into wider working and commercial arrangements.
Employer investment and attention have traditionally focused on developing compliant employee onboarding procedures, but from 1 October, equal focus will need to be given to understanding how labour is sourced across the organisation, making contractor governance and procurement oversight just as important as traditional right to work checking procedures.
It’s far from uncommon for organisations to rely on contractors, outsourced services and contingent labour, meaning the reforms have the potential to affect employers across almost every sector of the economy. HR, procurement, legal and commercial teams will all have a role in managing compliance where labour is sourced beyond the traditional employment relationship.
The Home Office is clearly moving to align the illegal working regime more closely with the realities of modern labour markets, placing greater scrutiny on how organisations source labour as well as who they employ. Employers that continue to treat right to work as solely an HR responsibility are likely to overlook compliance risks sitting elsewhere in the organisation that fall within scope from 1 October 2026.
Need Assistance?
The new rules could affect far more than your recruitment process. If your organisation engages contractors, outsources services or relies on complex labour supply arrangements, now is the time to review your compliance framework before the changes take effect.
DavidsonMorris advises employers on right to work compliance, illegal working prevention, contractor engagement and Home Office enforcement. We can review your current arrangements, identify potential compliance risks and help ensure your policies, contracts and processes are ready for the new regime.
Contact our business immigration compliance specialists today to arrange a fixed-fee telephone consultation.
Right to Work Changes 2026 FAQs
Do the new rules apply to every employer?
No. Every employer should understand the reforms, but the greatest impact is likely to be on organisations that engage labour outside traditional employment relationships. Businesses using contractors, subcontractors, outsourced service providers or other non-standard engagement models should review their arrangements before 1 October 2026.
Are agency workers now covered by the new legislation?
The legislation does not create a separate legal category for agency workers. Instead, it extends the right to work regime to specified wider working arrangements. Depending on the contractual arrangements, some agency labour may fall within those provisions, but employers should avoid treating agency workers as a standalone category under the new rules.
Will employers have to use a Digital Verification Service Provider (DVSP)?
The recognised Home Office checking routes remain available after 1 October 2026. Employers can continue to establish a statutory excuse using the appropriate checking method permitted under the Code of Practice. A registered DVSP is one available option, not a mandatory requirement.
Does every business in a labour supply chain become legally responsible?
The final Home Office Code of Practice does not impose blanket liability throughout a labour supply chain. Responsibility is determined by the statutory framework and the contractual relationships between the parties, making it important for organisations to understand where compliance obligations sit within their own commercial arrangements.
Are civil penalties increasing from October 2026?
The reforms expand the scope of the illegal working regime rather than increasing civil penalty levels. Employers that cannot establish a statutory excuse continue to face existing civil penalties, including fines of up to £60,000 per illegal worker for repeat breaches.
Should employers update their right to work policies before October?
Existing right to work procedures should be reviewed alongside procurement processes, contractor engagement practices and outsourcing arrangements. Many organisations will already have compliant recruitment procedures in place but may need to strengthen governance around non-traditional labour arrangements before the new rules take effect.
Do the October reforms apply to businesses without a sponsor licence?
The expanded illegal working regime applies far more widely than the sponsor licence system. Any organisation engaging labour in the UK through arrangements falling within the legislation should assess whether the new compliance obligations apply, regardless of whether it sponsors migrant workers.
Do the new rules apply retrospectively?
The reforms take effect from 1 October 2026 and apply prospectively. Employers should nevertheless use the period before implementation to review existing labour arrangements, contractual documentation and compliance procedures so they are ready when the new regime comes into force.
