Right to Work checks extend to subcontractors from 1 October

Businesses that use subcontractors, agency labour and complex workforce supply chains have less than a month to prepare for a major expansion of Right to Work rules, immigration lawyers have warned.

The changes, introduced under the Border Security, Asylum and Immigration Act 2025, come into force on 1 October 2026 and will extend Right to Work obligations well beyond traditional employees. Firms that fail to carry out the required checks could face civil penalties of up to £60,000 per illegal worker.

The government’s penalties for employing illegal workers guidance already sets the civil penalty at up to £60,000 for each illegal worker, with criminal sanctions of up to five years in prison and an unlimited fine in the most serious cases. What changes in October is the range of working arrangements to which those penalties can apply.

Under the new framework, businesses may no longer be able to assume that individuals classed as self-employed, or engaged through subcontracting arrangements, sit outside the regime. Instead, liability could extend across labour supply chains, placing greater scrutiny on how workers are supplied, managed and verified.

“The reality of working arrangements rather than the labels”

Mandeep Khroud, head of immigration at law firm Irwin Mitchell, said: “Many firms operate through subcontractor networks and flexible labour arrangements. From 1 October, businesses will need to look much more closely at who is actually carrying out work on site and whether appropriate Right to Work checks have been completed.

“The Home Office has made clear that it will focus on the reality of working arrangements rather than the labels used in contracts. Businesses that assume a worker is outside the regime simply because they are described as self-employed could be taking a significant risk.”

The Home Office published a draft employer’s guide to right to work checks in July, setting out how the scheme will apply from 1 October to employment under a worker’s contract, to individual subcontractors and to online matching services, and how businesses should handle contracts that allow a worker to send a substitute.

According to Irwin Mitchell, the obligations are expected to cover individual subcontractors, individuals engaged under worker contracts, certain outsourced labour arrangements, platform-based and online matching services, and contracts containing substitution rights. Businesses could also find themselves exposed where they sit higher up the contractual chain and fail to put the necessary compliance measures in place.

To establish a statutory excuse against liability, the firm says businesses are expected to need robust contractual controls, processes for verifying workers’ identities, and measures to manage substitution arrangements.

Failure to comply could result in civil penalties of up to £60,000 per illegal worker, criminal sanctions in serious cases, suspension or revocation of sponsorship licences, and public naming by the Home Office.

One month to map the supply chain

The extension of checks to freelancers and gig workers was first flagged when the government set out plans to extend right-to-work checks to freelancers, prompting warnings at the time that many small business owners were unaware of the change. Delivery platforms have already tightened their own controls, with Deliveroo having sacked more than 100 riders for sharing accounts with people who had no right to work.

Khroud added: “With just one month until implementation, firms should be reviewing subcontractor arrangements, auditing onboarding processes and mapping their labour supply chains. Organisations that leave preparations until October may find themselves exposed to significant financial and reputational risks.”

Irwin Mitchell is advising businesses to use the remaining weeks before the changes take effect to review contracts, assess workforce structures and ensure they have appropriate systems in place to verify the immigration status of anyone carrying out work on their projects.

For smaller firms that lean on subcontracted or platform-sourced labour, the practical task, on the law firm’s reading of the rules, is to establish who is actually doing the work, whether a valid check has been carried out on each of them, and who in the chain is responsible for doing it.

Amy Ingham

Amy Ingham is a reporter at Business Matters, covering UK business news with a focus on breaking news, business policy, late payments and insolvency. She joined the magazine in 2026 after completing the NCTJ Diploma in Journalism at Harlow College’s journalism school. Her recent reporting includes British Steel’s nationalisation and its impact on SME suppliers, the decline in late payments by large firms, and Insolvency Service director disqualifications. Reach her at aingham@cbmeg.co.uk.