Last month, the Home Office published a draft Code of Practice on Preventing Illegal Working: Right to Work Scheme for Employers (the Code). It confirms that section 48 of the Border Security, Asylum and Immigration Act 2025 (BSAI 2025) will introduce one of the most significant expansions of UK illegal working law in recent years.  

The legislation will fundamentally rewrite who bears legal responsibility for preventing illegal working and extending that responsibility beyond traditional employment relationships and into the world of contractors, subcontractors, gig economy workers and online platforms. 

If your organisation sources labour through outsourcing agencies, engages self-employed contractors or operates multi-layered supply chains, the time to understand these changes is now and before the 1 October 2026 deadline.  

The Existing Framework and Its Gap 

Under the framework established by the Immigration, Asylum and Nationality Act 2006, section 15 makes it unlawful to employ an adult subject to immigration control unless that adult has the right to work in the UK. An employer who fails to carry out the right to work checks faces a civil penalty of up to £45,000 per illegal worker for a first breach, rising to £60,000 for a repeat breach within three years. 

The existing scheme has applied only to individuals classified as employees under a contract of employment. Organisations engaging workers or self-employed individuals have not had any legal obligation to check an individual’s entitlement to work in the UK.  

What Section 48 Does: Three New Categories of Working Arrangement 

Section 48 amends the 2006 Act by inserting two new provisions, sections 14A and 15A which together extend the illegal working regime to a much wider range of working arrangements. 

Section 14A extends the meaning of “employer” and “employment” throughout sections 15 to 24 of the 2006 Act to cover three additional categories of working arrangement: 

These changes expand the definition of employer for immigration compliance purposes only. They do not affect employment status or employment rights more broadly. 

The draft Code confirms that right to work checks will not be required for individuals who are genuinely self-employed, operating in business on their own account and who contract directly with clients or customers. However, individuals who obtain work through an intermediary, platform or similar arrangement and who are not operating an independent business will fall within scope. 

Supply Chain Liability: The New Section 15A 

New section 15A creates extended liability for those higher up the contractual chain. It applies in three scenarios:  

In each case, the person higher up the employment chain may be treated as employing any individual who personally performs the work, including where there is no direct contractual relationship with that individual. Liability can therefore exist simultaneously at multiple levels of the same supply chain. 

An equivalent rule applies to online matching services, where the matching service connects a service provider to a client and the service provider and then engages an individual to perform the work, the matching service may itself be treated as an employer of that individual for illegal working purposes. 

In practice, the Home Office will in the first instance seek to identify the employer who holds the direct contractual relationship with the worker. The extended liability provisions operate as a back-up, where that employer cannot be identified or where the prescribed requirements have not been met. If this occurs, a civil penalty may be imposed on another person further up in the employment chain. 

Establishing a Statutory Excuse: The Prescribed Requirements 

The new regime is accompanied by the Immigration (Restrictions on Employment and Residential Accommodation) (Prescribed Requirements and Codes of Practice) (Amendment) Regulations 2026 (SI 2026/700) also coming into force on 1 October 2026. These Regulations set out how businesses in the chain can establish a statutory excuse against a civil penalty. 

The prescribed requirements contain three elements. First, a written statement must be in place before the individual starts work. Second, where the contractual arrangement permits substitution, the employer must implement controls before work commences to ensure that any substitute's right to work is verified before they begin work and that no individual may substitute before that verification has taken place. Third, the business must maintain proportionate systems and processes throughout the engagement. Together, these three requirements make the regime an ongoing operational compliance obligation. 

The Code confirms that the scheme will not apply to organisations that act solely as end users, clients or customers of a service. Where a party is the final recipient of services, for example an organisation using agency workers or contractors purely for its own internal purposes, rather than part of a chain supplying labour onwards to a third party, it will not be responsible for carrying out right to work checks. 

Practical Steps: What Businesses Should Do Now 

Whilst the Home Office updates the Employer's Guide to Right to Work Checks, we strongly advise businesses to undertake an audit of their practices and internal processes before the new legislation comes into force. This will allow businesses to identify who is in scope, allocate responsibility across contractual chains and ensure the correct processes are in place. Businesses should prioritise the following steps: 

Conduct a full audit of every category of worker in your organisation, not just those on the payroll. Compile lists of your agency workers, individuals on workers’ contracts, individual subcontractors, casual workers, zero-hours workers, gig workers and anyone providing services through an online matching platform, liaising with procurement, operations, facilities and business teams as needed. 

Audit your agency agreements, subcontractor contracts and outsourcing arrangements to establish whether they contain the right to work compliance obligations. Contracts that lack these terms will need to be reviewed.  

Determine who in your contractual chain is responsible for conducting right to work checks, retaining evidence and responding to Home Office requests. Decide whether checks will be carried out centrally, by the supplier or through a hybrid model.  

For arrangements that contain a substitution clause, implement processes before work commences to ensure that a right to work check is carried out and that responsibility for such checks is not delegated to the worker. Review and confirm that the individual performing the work is the same individual whose right to work has been verified. 

If you use digital tools for right to work checks, confirm whether your provider is registered in the DVS Register.  

Licensed sponsors should be aware that a civil penalty under the expanded regime can have consequences well beyond the financial. It can trigger Home Office enforcement action against an existing Sponsor Licence leading to significant implications with the ability to hire sponsored workers. 

For tailored advice on how these changes will affect your business, please get in touch with our Head of Immigration, Sundeep Rathod.