From 1 October 2026, the UK’s right to work regime is expected to expand significantly. The changes will affect many businesses that rely on contractors, agency workers, casual staff and outsourced service providers, not just traditional employees.
What is changing?
Until now, businesses have generally been responsible for checking the right to work of their own employees. Under the new rules, responsibility may extend to a much wider range of workers, including agency workers, contractors, gig economy workers and individuals engaged through certain online platforms.
In some circumstances, liability may also extend beyond the organisation that directly employs the worker. Businesses higher up a contractual chain may find themselves exposed if illegal working is identified within their supply chain.
In practical terms, relying on the fact that someone is employed by an agency or engaged as a contractor will no longer be sufficient.
Why does this matter?
The consequences can be serious. Businesses found to be engaging illegal workers may face penalties of up to £60,000 per worker, sponsor licence revocation, reputational damage, business disruption and criminal sanctions.
Workforce compliance has become a board level risk that may affect procurement, outsourcing, operations, legal and compliance teams.
The biggest challenge
Perhaps the most difficult aspect of the new regime is the lack of certainty around when the rules apply.
The draft Home Office guidance published in July 2026 includes various examples intended to illustrate the new framework. However, the guidance repeatedly states that outcomes will depend on the specific contractual arrangements and how they operate in practice.
For businesses, this creates a challenge. Modern workforces often involve a mixture of employees, agency workers, consultants, personal service companies, subcontractors and outsourced service providers. The distinction between arrangements that fall within the new rules and those that fall outside them is not always clear.
What can businesses do now?
A comprehensive approach should be taken to ensure oversight of all working relationships which may be caught by the scheme. Businesses should take proactive steps ahead of the regime coming into force including:
- mapping all labour supply arrangements across the business;
- reviewing contracts with agencies, suppliers and subcontractors;
- introducing clear responsibilities for right to work compliance;
- strictly enforcing systems that prevent workers from being onboarded until checks are completed; and
- implementing audit rights, substitution controls and information sharing obligations within supply chain contracts.
The new rules remain complex and, in some areas, uncertain. We have highlighted the challenges in our previous article.
For tailored advice on how your business can navigate these changes, please do not hesitate to get in touch with the Bird & Bird Business Immigration Team.
For further information, please contact:
Yuichi Sekin, Partner, Bird & Bird
yuichi.sekine@twobirds.com
