Employer right to work checks are changing on 1 October 2026, and so does the question of who can be fined when a check has not been done. The Home Office laid the regulations before Parliament at the end of June and published its draft code of practice on 1 July. The date is confirmed.
We wrote earlier this year about the proposal to extend right to work checks to the gig economy. The detail is now available, and the part receiving least attention is the part most likely to catch businesses out. A business can face a civil penalty of up to £60,000 for a worker it has never engaged and has no contract with.
Which working arrangements now need an employer right to work check?
The employer right to work check currently applies to employees. From 1 October 2026 the following are all treated as employment when the Home Office considers whether someone has been employed without the right to work.
- A contract of employment. Unchanged from today.
- A worker’s contract. Work or services provided by an individual to a company or other entity, excluding that individual’s own clients and customers.
- An individual subcontractor. Work or services where the engaging business has itself been contracted by a third party to provide the same work.
- Online matching services. A business passing the details of an individual service provider to potential clients or customers.
These changes apply only to arrangements starting on or after 1 October 2026 and do not apply to arrangements that began before that date.
This is wider than the meaning of employment in employment law, and that is the trap. A contractor your HR team has correctly categorised as self-employed for employment law purposes may still sit within scope here, so the two questions now need answering separately. People who are genuinely self-employed and supplying their own clients directly are not caught.
Businesses should review their employer right to work checks now to ensure they remain compliant when the expanded rules come into force.
Employer right to work checks: how can liability extend beyond the direct employer?
The draft code allows a civil penalty to move through the contractual chain. There are three routes.
Subcontracting and employer right to work checks
Company A is contracted to provide services to a client and subcontracts part of that work to Company B, which employs the workers. If those workers do not have the right to work, both A and B can be liable, and so can Company C or D further down a longer chain.
Online matching arrangements and employer right to work checks
Company A’s matching service connects Company B with a customer. Company B contracts with that customer and supplies the workers. Both may be liable.
Worker substitution arrangements
Company A engages Worker A, and the contract permits Worker A to send Worker B in their place. If Worker B does not have the right to work, Company A may be liable, despite having no contractual relationship with Worker B at all.
Responsibility for the check itself still rests with whoever holds the direct contract with the worker. Extended liability is most likely to apply where the Home Office cannot identify that business or it has failed to comply, but the exposure exists either way.
Protecting your business from employer right to work check liability
A business that is not the direct employer cannot rely on a right to work check it never carried out. It can still establish a statutory excuse, but only by meeting three prescribed requirements in full:
- Contractual terms and conditions
- Substitution controls
- Identity verification systems and processes
Contractual terms and conditions
Contractual terms need the longest lead time, because templates, subcontracts and supplier terms all have to be revisited and your counterparties have to agree the changes. The requirements point towards an obligation on the counterparty to carry out compliant checks, controls on onward subcontracting, audit rights, and rights to suspend or terminate for non-compliance.
Live contracts matter as much as templates, so that downstream liability does not travel back to you.
Substitution controls
Substitution controls are new thinking for most businesses. Where a contract permits substitution, you will need a system establishing that the person doing the work is the person whose right to work was checked.
Penalties for non-compliance
Unlawfully employing a worker under a covered arrangement carries a civil penalty of up to £60,000 per worker, and licensed sponsors also risk their licence.
An employer that knowingly employs someone without the right to work, or has reasonable cause to believe that they do not have the right to work, also risks criminal liability, with an unlimited fine and up to five years’ imprisonment.
An Immigration Officer may also issue an illegal working closure notice preventing access to, and work at, the premises for up to 48 hours. The court may then make an illegal working compliance order imposing restrictions, including continued closure, for up to 12 months.
What do employer right to work checks mean for digital identity providers?
From 1 October, employers relying on a digital identity provider must use one registered as a right to work Digital Verification Service Provider on the Office for Digital Identities and Attributes register. Registration for identity checking generally is not enough.
This is easy to miss, because many background checking companies subcontract verification elsewhere. Ask your provider directly, in writing, who performs the check and whether they hold the right registration.
Employer right to work checks: what should employers do before 1 October?
- Map how you engage people to do work, categorising each arrangement against the definitions in the code.
- Audit flexible and outsourced labour, including zero hours, casual, agency, subcontractor and platform arrangements.
- Check your digital verification provider is registered, and switch if not.
- Review contracts and substitution clauses against the three prescribed requirements.
- Update your policy and train your people.
An updated Employer’s Guide is expected before 1 October, with worked examples of how extended liability applies. We will report on it once published, but the contractual work cannot wait for it.
How Paris Smith can help with employer right to work checks
Reviewing employer right to work checks before October 2026 could help businesses reduce compliance risk and avoid costly penalties.
Our Employment team and Immigration team can review how you engage workers, update your contracts and subcontracts, revise your right to work policy and train those carrying out checks.
Please contact the Employment team at er@parissmith.co.uk.
This article was prepared in collaboration with Vanessa Ganguin, an immigration law specialist, combining expertise in both employment and immigration law to help businesses understand the practical impact of the new right to work check requirements.
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