The Home Office published updated draft right to work guidance on 11 September 2026. The guidance, which comes into force on 1 October 2026, explains how the expanded Right to Work Scheme and new extended liability provisions will apply to a broader range of working and contractual arrangements.
Although the reforms are commonly described as an extension of right to work checks, their legal and operational effect is more nuanced. The direct employer will remain responsible for carrying out the prescribed right to work check. The more significant development for many organisations is the introduction of potential civil penalty exposure arising from certain non-direct contractual arrangements.
The Right to Work Scheme has traditionally focused on individuals engaged under contracts of employment. From 1 October 2026, its scope will expand to include individuals engaged under worker contracts, individual subcontractors and certain service providers operating through online matching services.
The substance of the arrangement will be important. The contractual label adopted by the parties will not, by itself, determine whether responsibilities arise under the scheme. The guidance indicates that organisations should consider who engages or supplies the individuals, who is contractually responsible for delivering the work or services, whether individuals are required to perform the work personally, whether substitution is permitted and how the arrangements operate in practice.
Extended liability can arise in three categories of contractual arrangement:
i. The first concerns a person that is contracted to provide work or services to a third party and enters into a contract with another employer whose workers perform all or part of those services.
ii. The second concerns an online matching service that matches a service provider with a client or customer, following which the service provider contracts with that client or customer.
iii. The third concerns an employer that engages an individual under an arrangement permitting the individual to provide a substitute to perform the work or services.
Where one of these categories applies, a person who does not hold the direct contractual relationship with the worker may be treated as an employer for the purposes of the Right to Work Scheme and may face a civil penalty if illegal working is identified.
However, extended liability is not automatic. The Home Office states that it will ordinarily seek to identify the person responsible for the relevant contractual arrangements and determine whether that person has established a statutory excuse, rather than treating every party in a contractual chain as liable.
One of the most important clarifications in the updated guidance is that extended liability does not apply to every organisation purchasing work or services from another business. It also does not generally apply to a client, customer or end-user purchasing services solely for its own internal operations.
For example, the guidance considers a retailer that engages a facilities management company to provide cleaning services at its premises. Because the retailer is purchasing the cleaning service for its own operations and is not providing that service onwards to another party, extended liability does not apply to the retailer. Responsibility remains with the facilities management company as the employer of the cleaners.
The Home Office adopts a similar approach to a manufacturing company obtaining temporary production workers from an employment business for use within its own business. Where the employment business simply supplies workers, and the manufacturer is not responsible for providing the work or services onwards as part of a contractual chain, extended liability does not apply merely because agency labour is used.
By contrast, the guidance describes a logistics company contracted to provide warehousing and distribution services to a retailer and outsourcing delivery of those services to a third-party company. In that example, the logistics company is responsible for providing the services onwards to the retailer and may therefore fall within the extended liability regime. The retailer, which purchases those services for its own operations, does not.
The distinction is therefore not simply between direct employment and outsourcing. Organisations will need to examine the function they perform within the relevant contractual structure.
The employer with the direct contractual relationship with the worker remains responsible for completing the prescribed right to work check and establishing the ordinary statutory excuse.
The extended liability provisions do not transfer that responsibility automatically to another organisation in the contractual chain. Nor do they make another party liable solely because the direct employer has failed to complete a compliant check.
Instead, a person potentially subject to extended liability must establish a separate statutory excuse by complying with the prescribed requirements applicable to the contractual arrangements.
Where extended liability applies, relevant contractual arrangements must include a written statement containing specified terms before the work or services begin.
These provisions must:
Contractual wording alone will not be sufficient. The Home Office expects potentially liable organisations to demonstrate that arrangements operate effectively in practice and that they have taken reasonable and proportionate steps to satisfy themselves that right to work requirements are being met. Relevant evidence may include contracts, audit records, assurances received from employers or service providers, compliance review records and information showing how concerns were identified and addressed.
The new regime has significant implications for organisations engaging individuals under contracts that permit substitution.
Where substitution is permitted, the employer must have processes in place before work begins to ensure that a prescribed right to work check is completed for every substitute. Responsibility for that check must not be delegated to the individual providing the services, and no substitute may begin work before their right to work has been verified.
The contract must also provide appropriate enforcement options where the employer or worker knows, or has reasonable cause to believe, that a substitute is working illegally. Throughout the engagement, the employer must have systems capable of confirming that the person performing the work is the person whose right to work was checked.
The position is different where substitution is prohibited by the contract but occurs without authorisation. In those circumstances, the Home Office will consider whether the prescribed right to work check was completed for the worker who was directly engaged.
A person potentially exposed to extended liability, an online matching service or an employer operating a substitution model must have proportionate systems and processes for verifying the identity of the person performing the work.
The guidance identifies possible measures including workplace passes, facial recognition technology, biometric or attendance systems, checks against training or qualification records and periodic identity re-verification. The appropriate approach will depend on the nature of the work, the contractual arrangements and the level of substitution or impersonation risk.
Existing operational systems may be used, as may systems operated by another party or a third-party provider, provided reasonable steps have been taken to ensure that those systems are effective and that the prescribed requirements are being met.
The commencement provisions are important.
The expanded direct civil penalty regime for individuals engaged under worker contracts, individual subcontractors and relevant online matching arrangements applies where the employment commences on or after 1 October 2026.
Organisations should therefore prioritise new agreements and arrangements due to be entered into, renewed or replaced from that date. Reviewing existing arrangements now may also help identify which contractual models will require amendment when they are renewed or replaced.
Separately, the updated guidance confirms that a manual check of an original, expired biometric residence permit is not acceptable evidence of a right to work. Employers will establish a statutory excuse in those circumstances only by carrying out the prescribed online right to work check.
This should be reflected in recruitment procedures and training, although it should be treated as an operational reminder rather than as part of the new extended liability regime.
Before 1 October 2026, organisations should:
The reforms do not impose blanket responsibility on every organisation using contractors, agency labour or outsourced service providers. Their application depends on the precise contractual model and how it operates in practice.
Nevertheless, businesses responsible for providing services onwards through contractual chains, online matching platforms and organisations permitting worker substitution may face materially different compliance responsibilities from 1 October 2026.
The practical message is clear: organisations should not rely solely on standard warranties stating that another party will undertake right to work checks. Where extended liability applies, contracts must incorporate the prescribed protections and businesses must be able to evidence that those protections operate effectively.
For assistance assessing whether particular arrangements fall within scope, reviewing contractual documentation or undertaking a right to work compliance review, please contact Lynsey Blyth.
