1. Extended scope of existing RTW regime
As set out in our last article, there is now a duty to conduct RTW checks that extends beyond employers/ employees. There are three new categories of working individuals who have been brought within the scope of the RTW regime: (i) workers; (ii) individual sub-contractors; and (iii) online matching services.
2. Extended liability
Extended liability is a new concept introduced under the updated RTW regime. The Home Office can pass the civil penalty liability further up the chain of contracts, rather than just looking to the direct employer. The focus of the extended liability regime is on parties in the middle of the chain of contracts, rather than the “end users” (i.e. the ultimate clients in a chain). Extended liability broadly applies in the following scenarios:
- Subcontracting: where a person is under a contract to provide work or services to a third party and enters into a contract with another employer providing workers to fulfil that contract.
- Online matching: where an online matching service provides details of a service provider to clients or customers, and the service provider enters into a contract with a client or customer (e.g. gig economy workers).
- Substitution: where an employer employs an individual to provide work or services, and the contractual arrangements allow the individual to substitute their work or services to another individual.
3. Statutory excuse
Employers can establish a statutory excuse against right to work checks extended liability by complying with the prescribed requirements relevant to the contractual arrangements before the work commences and being able to provide evidence of that compliance if requested.
Businesses can protect themselves by addressing the following points in commercial terms with third party providers:
- Contractual terms and conditions: a written statement must be in place before the work or service commenced, with a requirement for the employer or service provider to carry out right to work checks among other requirements.
- Substitution controls: prescribed right to work checks must be carried out on any substitutes, and substitutes must not carry out any work before the right to work has been verified. Businesses must ensure that for the duration of the employment, that the worker and their substitute are the same individuals whose right to work has been checked.
- Identity verification: proportionate systems and processes should be in place to ensure that the individual carrying out the work or services is the same individual on whom a right to work check has been carried out.
In preparation for the new right to work regime, businesses should begin with the following actions:
Audit workforce in readiness
Consider whether your workforce has workers or self-employed contractors who might be considered to be workers that would require a right to work check.
There is a tension here with employment and tax status, as undertaking a right to work check may imply uncertainty over someone’s status as self-employed (as opposed to them being an employee or a worker). However, doing a right to work check in and of itself is unlikely to be determinative of status, and where there is any doubt over someone’s status we would generally suggest that the best approach is to conduct the check.
Consider contractual provisions
Review any services agreements, supply or outsourcing contracts ahead of October 2026. Although the regime change is not backwards looking, and would only apply to new arrangements from October 2026, overarching/master service agreement arrangements may require amendment letters to ensure that they contain right protections for compliance.
Any warranties and indemnities contained in existing contracts and arrangements should also be reviewed in light of the changes (although it should be noted that these cannot provide protection from criminal penalties).
Remain mindful of strict Home Office compliance
In the wider context, the Home Office is clamping down on compliance and the general mood in government is to be tough on immigration. Therefore, it is important to consider the right to work regime as part of your general compliance obligations, particularly if you have a sponsor licence.
