Right to Work Changes: What Do They Mean for Employers in Northern England?

Northern England’s construction, logistics, warehousing, manufacturing and other labour-intensive sectors often rely on complex networks of contractors, subcontractors, temporary workers and flexible labour. From 1 October 2026, businesses using these arrangements may need to apply much greater scrutiny under the expanded Right to Work (RTW) Scheme.

The UK Government has published a draft Code of Practice on preventing illegal working and a draft Employer’s Guide to right to work checks, explaining how the expanded Scheme and related civil penalties will operate.

The changes bring more workers and working arrangements within the RTW Scheme. They also introduce potential liability for businesses involved in certain supply-chain, online matching and substitution arrangements.

Civil penalties can reach £45,000 per illegal worker for a first breach and £60,000 per worker for a repeat breach within three years.

For a broader overview of the changes and what they mean for employers, see Fragomen’s previous RTW blog.

What Is Changing?

From 1 October 2026, the RTW Scheme will extend the scope of the workers on whom organisations will be responsible for conducting right to work checks beyond individuals under traditional contracts of employment. It will also extend to:

• • • Individuals engaged under a worker’s contract;
    • Individual subcontractors; and
    • Individuals engaged through certain online matching services providing the details of individuals providing services to potential clients or customers.

The changes also introduce “extended liability” in defined contractual arrangements. This means that, in certain circumstances, a business without a direct contractual relationship with a worker may face potential civil-penalty liability if that worker is working illegally.

The business that directly employs or engages the worker remains responsible for conducting the prescribed RTW check. Extended liability does not automatically transfer that responsibility to another party or make every business in a contractual chain liable for the direct employer’s failure.

However, where extended liability applies, other parties may need to meet prescribed contractual, substitution and identity-verification requirements to establish their own statutory excuse against a civil penalty.

For the newly covered working arrangements, the draft Guide states that a civil penalty may only be imposed where the relevant contractual arrangements were entered into on or after 1 October 2026.

Why Are the Changes Relevant to Northern England?

Many organisations across Northern England operate in sectors that depend heavily on subcontracted, temporary, contingent or platform-based labour. These include:

• • • Construction;
    • Logistics and warehousing;
    • Manufacturing and food production;
    • Delivery services;
    • Hospitality;
    • Cleaning and facilities management; and
    • Security services.

Businesses operating across multiple sites, projects or customer locations may have limited visibility over every individual carrying out work throughout their contractual chains. They may also rely on several internal and external teams, including HR, procurement, operations and third-party suppliers, to manage worker onboarding and compliance.

The new rules make it increasingly important to understand not only who performs the work, but also how that work is contractually arranged, which organisation directly engages each worker and who is responsible for the required checks.

Contract Structure and Sector Will Determine Potential Liability

The draft Guide includes several examples that are particularly relevant to businesses operating across Northern England.

Construction Supply Chains

In the Home Office’s construction example, a property developer contracts to build new homes and uses other businesses to provide workers through a chain of contracts.

Because the developer is responsible for delivering the work to a third party and relies on subcontractors to supply workers to fulfil that responsibility, it may be liable for a civil penalty for the purposes of extended liability in case such individual subcontractors are working illegally.

This could make contractual oversight, restrictions on onward subcontracting and evidence of supplier compliance particularly important for developers and principal contractors.

Logistics, Warehousing and Distribution

The draft Guide also considers a logistics company that contracts to provide warehousing and distribution services and then outsources the work to another business.

The logistics company may fall within the extended-liability provisions because it remains contractually responsible for delivering the services and relies on another business to supply workers to fulfil that obligation.

However, the retailer purchasing the warehousing and distribution services for its own operations would not fall within extended liability in the Home Office’s example. This distinction demonstrates why businesses must examine the substance of their contractual arrangements rather than assume that every customer or organisation in a supply chain faces the same obligations.

Manufacturing and Temporary Labour

In another example, a manufacturing company obtains temporary production workers from an employment business to support its own factory operations.

The draft Guide indicates that extended liability would not apply to the manufacturing company in this scenario because it uses the workers within its own operations and does not provide their work or services onwards to another party. Responsibility for the prescribed RTW checks remains with the employment business that directly engages the workers.

These scenarios may produce different outcomes depending on the underlying facts. Businesses should therefore review how their arrangements operate in practice, rather than relying solely on contractual labels or descriptions such as “self-employed,” “contractor” or “service provider.”

How Can Businesses Establish a Statutory Excuse?

Where extended liability applies, a business must demonstrate compliance with the relevant prescribed requirements relating to its contractual arrangements, substitution controls, and identify verification processes, to establish a statutory excuse against illegal working.

Contractual Terms and Conditions

Businesses seeking to establish a statutory excuse must have written contractual terms that:

• • • Require the relevant employer or service provider to conduct prescribed RTW checks;
    • Restrict onward subcontracting without prior consent;
    • Permit auditing and monitoring of ongoing compliance;
    • Allow appropriate enforcement action, including suspension or termination of the contract; and
    • Require cooperation with Home Office investigations.

A business may rely on assurances from employers or service providers elsewhere in the contractual chain, but it must take reasonable steps to confirm that those assurances are reliable and that the requirements operate effectively in practice.

Substitution Controls

Where an arrangement permits the worker to be substituted with another individual to carry out the work, the relevant business should ensure that the direct engager of the worker (i.e. the business that employs or engages the worker) implements appropriate substitution controls such as those that:

• • • Require a prescribed RTW check for every substitute;
    • Prevent workers from assuming responsibility for conducting the checks themselves;
    • Prevent substitutes from beginning work before their RTW status has been verified;
    • Allow action where illegal working is identified or reasonably suspected; and
    • Confirm that the individuals carrying out the work are the same people whose RTW status has been checked.

These controls may be particularly relevant to delivery platforms and other businesses that allow workers to arrange substitutes.

Identity Verification

Businesses may also need proportionate systems to confirm that the individual performing the work is the same person who underwent the RTW check.

Depending on the organisation and working environment, these measures could include:

• • • ID cards or work passes;
    • Facial-verification technology;
    • Biometric or attendance-management systems;
    • Checks against training records, qualifications or licences; and
    • Periodic identity verification.

The appropriate approach will depend on factors such as the business’s size, operational model, workforce and the complexity of its contractual arrangements.

Practical Steps for Northern England Businesses

Although the Home Office’s supporting guidance remains in draft, businesses should begin reviewing their arrangements before the changes take effect. Practical steps may include:

1. 1. 1. Map the workforce and contractual chain: Identify workers, contractors, subcontractors, temporary labour, platform-based engagements and substitution arrangements across every relevant site and project.
      2. Identify the direct employer: Confirm which organisation directly employs or engages each category of worker and who currently carries out the prescribed RTW check.
      3. Distinguish between operating models: Determine whether the business purchases services for its own operations or provides work or services onwards to another party using a contractual chain.
      4. Review contracts: Introduce or update provisions covering RTW checks, onward subcontracting, audit rights, compliance evidence, enforcement action and cooperation with investigations.
      5. Strengthen substitution processes: Ensure no substitute can begin work before the required RTW and identity checks have taken place.
      6. Review identity controls: Consider whether existing site access, attendance and worker-verification processes adequately confirm who is carrying out the work.
      7. Train relevant teams: Ensure HR, procurement, legal, operations and site-management teams understand their respective responsibilities and escalation routes.
      8. Consider digital verification support: A registered RTW Digital Verification Service Provider (RTW DVSP) may help businesses conduct and manage certain checks. However, the employer remains responsible for ensuring that every RTW check meets the prescribed requirements.

Looking Ahead

For employers across Northern England, particularly those managing labour-intensive operations or complex contractual chains, the expanded RTW Scheme creates a timely reason to examine workforce visibility, supplier governance and onboarding processes.

The new rules will not affect every contractor or service arrangement in the same way. The structure of the contract, the organisation’s role in providing or arranging the work and the way the arrangement operates in practice will determine where responsibility and potential liability may sit.

Early preparation can help businesses identify gaps, clarify responsibilities and strengthen their ability to demonstrate compliance before the changes take effect on 1 October 2026.

Note: Fragomen interns Nat Barton and Flora Mbanu Osobi contributed to this blog.

Need to Know More?

Fragomen has extensive experience delivering tailored immigration compliance solutions for businesses of all sizes. We can assist with workforce and supply-chain audits, contractual reviews, process evaluations and preparations for the expanded RTW Scheme.

To learn more about the changes and how Fragomen can support your business, please contact [email protected].

Fragomen is an RTW DVSP registered with the Office for Digital Identities and Attributes (OfDIA). Our dedicated WorkRight team provides digital verification services to employers.

To learn more about these changes directly from our team, join us at Fragomen Sheffield for an exclusive breakfast roundtable exploring the latest developments and their implications for employers in practice on 13 October from 8:30 AM - 10:30 AM BST. Register for Coffee, Croissants & Compliance: Right to Work Changes Explained. 

This blog was published on 16 September 2026 and reflects information available at that time. Updates may occur as policies evolve. To stay informed on the latest immigration news and analysis, please subscribe to our alerts and follow Fragomen on LinkedIn, Facebook and Instagram.