From 1 October 2026, contractors could be fined up to £60,000 for a worker lacking the right to work, even if they never met them or knew they were on site. It is the most radical expansion of the right-to-work regime since it began in 2006.
The new laws redefine employer liability and protection against illegal working practices. It is crucial that contractors understand their full exposure and how to protect themselves from serious sanctions.
What’s changing?
The definition of ‘employment’ for right-to-work purposes extends beyond direct employees to cover workers’ contracts, casual and agency-style labour, individual subcontractors and online platforms that match service providers with clients.
A new concept of ‘extended liability’ means that where a business is contracted to provide work or services and subcontracts any part of them, it can be held liable for a civil penalty if anyone brought in to work on the project does not have the right to work. This goes all the way down a subcontracting chain.
The Home Office gives the example of a developer that wins a contract to build new homes and engages bricklayers and groundworkers through a chain of contracts. The developer may be treated as the employer of anyone in that chain, together with any other party in the chain of contracts above the direct relationship with the worker. The Home Office will ultimately decide which party or parties to penalise, particularly where it is unclear who engaged the worker.
The right to substitution in workers’ contracts also creates liability from 1 October. If a substitute steps on site without a prior right-to-work check, the engaging firm may also be liable if they work illegally.
Extended liability does not apply to clients, customers or end-users at the top of the chain who are purchasing work or services for themselves rather than providing them onwards to a third party.
What matters is how the arrangement works in practice. The Home Office states that it will examine how work is arranged and performed, rather than simply whether someone calls themselves self-employed.
What’s at stake?
Civil penalties can be up to £60,000 for each person working illegally. Breaches may also carry criminal liability, with an unlimited fine and up to five years’ imprisonment. Immigration officers can issue closure notices on premises. Sponsors can lose their licence to sponsor workers, in which case every sponsored worker risks losing their visa.
How to protect your firm
A statutory excuse against extended liability requires prescribed requirements to be met in full across three areas: contractual terms that oblige down-chain contractors to run compliant checks, prohibit further subcontracting without prior written consent, confer audit rights and allow suspension or termination; substitution controls ensuring that no substitute works before being checked; and proportionate identity verification confirming that the person on site is the person who was checked, for example, through site-access systems.
What should contractors do now?
- Audit all worker engagements, including casual, agency and subcontractors. Take reliable immigration and commercial contract advice.
- Train those who control site access, commercial teams and site managers.
- Get prescribed terms into contract templates for any entered into from 1 October.
- Build check-before-start workflows for any contract with substitution rights.
- Confirm your digital identity provider is registered for right-to-work checks on the Office for Digital Identities and Attributes register.
Originally published Construction News.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
