Right to Work rules extend to subcontractors with £60,000 fines

UK businesses face wider responsibility for checking workers’ immigration status from 1 October 2026, with Right to Work rules extending beyond direct employees and repeat breaches carrying fines of £60,000.

The changes cover individual subcontractors and certain other workers, including people engaged through online matching services, as reported by SmallBusiness.co.uk. A breach carries a £45,000 fine, rising to the higher amount for repeat offences.

What happened

The extension brings arrangements involving tutoring apps and tradesperson-matching platforms within the scope of the rules. Businesses using those services must consider their responsibilities even where they have not hired the person as an employee.

There are limits to the regime. Work performed outside the UK is excluded, as are individuals operating an independent business in their own name or through their own company who contract directly with customers.

For businesses operating through a contracting chain, the reported statutory-excuse provisions set out safeguards covering checks, further subcontracting, audit access and cooperation with enforcement. These provisions make the terms agreed with service providers an important part of compliance.

One requirement is that businesses oblige the companies they work with to conduct the necessary Right to Work checks on the individuals those companies employ to undertake the relevant work. Responsibility for carrying out those checks therefore needs to be addressed in the commercial arrangement.

The contract must also prevent work or services from being subcontracted again without written permission from the business at the top of the chain. That condition gives the lead business a means of controlling whether another provider is brought into the arrangement.

A further condition concerns access to compliance information. The contract must permit the individual or online matching service to audit the chain service provider’s compliance with both the new and existing Right to Work requirements.

Service providers must also be contractually required to cooperate with any Home Office investigation into illegal working. That can include supplying information about the chain, identifying the employers and services involved, and providing other information the department considers relevant.

The background

The Home Office’s stated case for enforcement extends beyond immigration control. It says illegal working can leave workers exposed to exploitation and abuse and allow businesses using that labour to compete unfairly with compliant operators.

There is also a potential insurance consequence for businesses. Employing people without permission to work could undermine insurance cover when a claim is made, adding a commercial risk alongside the civil penalty.

The change is particularly significant for operating models that draw on labour outside a permanent workforce. Seasonal demand, contractor support and short-notice shift cover can all involve people whose engagement is arranged by another organisation rather than by the business receiving their services.

What people are saying

Naomi Goldshtein, a partner at immigration law firm Fragomen, said businesses generally have a clearer picture of their employees than of contractors, subcontractors and other contingent workers. She identified that difference in visibility as a central issue for employers responding to the wider rules.

Her advice was to establish who actually performs work or services, the contractual basis for their involvement and how they entered the workforce. Those questions require businesses to look beyond their own employee records and understand the arrangements through which labour reaches them.

Goldshtein warned that assigning responsibility to another party would not, on its own, be sufficient. She said checks must use an approved method: manual checking, the Home Office’s online service or certified digital verification where appropriate.

She also identified consequences beyond a financial penalty, including operational disruption and reputational damage. Businesses holding a sponsor licence could face wider compliance implications, making the issue relevant to their ability to manage sponsored recruitment as well as their existing workforce.

In serious cases, Goldshtein said criminal prosecution could result in a prison sentence of up to five years and an unlimited fine. Those potential sanctions are separate from the £45,000 and £60,000 civil penalties outlined for breaches.

Mandeep Khroud, head of immigration at Irwin Mitchell, said the Home Office would examine the substance of working arrangements rather than rely on contractual descriptions. She warned that treating someone as outside the regime simply because their contract calls them self-employed could expose a business to significant risk.

What happens next

The immediate task for businesses is to audit their exposure across the organisations supplying workers or services. A priority is identifying providers that cannot confirm whether the necessary Right to Work checks have been completed.

The Home Office offers a Right to Work checker to help establish whether someone is entitled to work in the UK. Businesses need to distinguish that eligibility question from the separate task of ensuring their contractual arrangements contain the required safeguards.

Where the review identifies gaps, businesses should negotiate amendments to existing agreements so that providers’ obligations reflect the Right to Work provisions. Providers that are in breach, or cannot explain their compliance position, may need to be reconsidered.

Future procurement terms also need attention. The person responsible for engaging providers should understand the wider rules and penalties, while those drafting contracts need to incorporate the relevant requirements before new arrangements are agreed.