United Kingdom: Draft Code on Expanded Right to Work Scheme Clarifies Employer Obligations

July 17, 2026

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Country / Territory

At a Glance

  • The UK government has published a draft Code of Practice on Illegal Working (‘the Code’) setting out details of how the expanded Right to Work (‘RTW Scheme’) will be operationalised. The Code will be effective from October 1, 2026. 
  • Although the working arrangements that will fall within scope of the RTW Scheme have expanded, the Code confirms that responsibility for conducting prescribed right to work checks continues to rest with the employer that has the direct contractual relationship with the worker.  
  • The Code also implements the concept of ‘extended liability’, allowing civil penalties to move through the contractual chain beyond the direct employer if the direct employer cannot be identified or fails to comply. 
  • For businesses that are not direct employers, the Code prescribes contractual provisions, substitution controls, and identity verification systems and processes that ensure right to work compliance for the establishment of a statutory excuse. 
  • Moreover, the Code now permits employers to outsource impersonation checks to a right to work digital verification service provider using facial recognition technology. 
  • Employers should review their right to work compliance processes, contractual arrangements with labour providers and identity verification procedures ahead of the expanded scheme’s implementation on October 1, 2026. 
  • Update - July 17, 2026: As anticipated, on July 15, 2026, UK authorities issued a draft Employer’s Guide to Right to Work Checks providing examples, details of evidential requirements, and operational guidance on how employers and businesses liable to extended liability may establish and maintain a statutory excuse. We will update this alert when the final guidance is published.

The situation 

The UK government published a draft Code of Practice on Illegal Working (‘the Code’) setting out details of how the expanded Right to Work (‘RTW scheme’) will operate, effective October 1, 2026.  

The Code confirms that responsibility for conducting prescribed right to work checks continues to rest with the employer that has the direct contractual relationship with the worker but also introduces the concept of extended liability.  

 

Change  

Impact 
  • Expanded scope. The Code applies the broader definition of “employer” under  the expanded RTW Scheme to include: 
      • Those working under a worker’s contract: Where an individual is engaged under a contract (other than a contract of service or apprenticeship) and the business is not a client or customer of that individual.   
      • Individual sub-contractors: Where an individual is engaged via a sub-contractor to perform work for the business, and the business itself is not a customer of the individual.  
      • Those engaged through an online matching service: Where an individual is engaged through an ‘online matching service’ and the business operates that service and charges a fee or commission for making the match.  
  • Exclusions. The Code clarifies those workers who are outside the scope of the RTW scheme.   
      • Genuinely self-employed individuals who run their own business and contract directly with clients. This includes services provided to the public or through normal business-to-business contracts, where a service is being purchased rather than an individual being employed. 

 

 

  • In advance of the implementation of the Code, businesses should map their workforce models, supply chains, and service delivery structures.  
  • This will help businesses determine which individuals will fall within the scope of the expanded RTW Scheme and where responsibility for conducting right to work checks would lie. 

 

 
  • Extended liability. The Code confirms that employers who directly employ or engage the worker remain legally responsible for carrying out the required right to work checks. However, it implements the concept of ‘extended liability’, allowing civil penalties to move through the contractual chain beyond the direct employer if the direct employer cannot be identified or fails to comply.  
      •  Parties in a contractual chain who are not the direct employer can establish a statutory excuse by following the ‘prescribed requirements’.  
  • The expansion of liability increases compliance complexity and risk exposure for businesses, particularly those operating layered or non‑traditional workforce models.  
  • Due to this heightened scrutiny, organisations should review their contractual chains and ensure robust controls are in place as civil penalties can reach up to GBP 60,000 per worker found to be in violation. 
  • Prescribed Requirements 
      • Contractual obligations. The Code sets out prescribed contractual requirements for businesses in supply chains and service delivery models seeking to establish a statutory excuse. This includes written terms requiring the relevant employer to conduct right to work checks, controls on onward subcontracting, audit or monitoring rights, rights to suspend or terminate arrangements where requirements are not met, and cooperation with Home Office investigations. These requirements may need to be reflected through the wider contractual chain.  
      • Substitution controls. Where a contract permits substitution, the Code expects businesses to implement appropriate controls to ensure any substitute is verified before work starts. This includes completing right to work checks for substitutes, ensuring responsibility for those checks is not delegated to the individual worker, preventing unverified substitutes from performing the work, retaining contractual rights to suspend or stop the substitute from working, require remedial action, and terminate the arrangement where illegal working is identified or reasonably suspected. These controls should operate throughout the engagement. 

 
  • Businesses will need to review and update standard terms, supplier agreements, and procurement processes to embed compliant written statements, ensure adequate control over substitution, and review oversight rights and cooperation obligations.  

 

  • Businesses using contractor, flexible workforce or gig-based models with substitution rights should review their onboarding, contractual and monitoring processes.  

 

  • Businesses will require clearer approval processes and may need to redesign engagement models — such as strengthening onboarding controls and introducing identification verification and/or monitoring systems to avoid potential civil penalties where substitution occurs. 

  

  • Failure to implement and evidence these measures may expose organisations to liability even where they are not the direct employer. 

 

 

 
  • Outsourcing of facial verification for manual and online RTW checks. The Code now permits employers to outsource facial verification to a right to work digital verification service provider (RtW DVSP) to confirm that the individual presenting for work matches the image on the document checked.  
      • Use of a RtW DVSP is optional. 
  • Employers may choose to outsource identity checks by using facial ID verification, through a RtW DVSP. While use of a DVSP is optional, any provider engaged must be OFDIA‑registered, which may require changes to provider selection. 
  • This outsourcing option will allow businesses to delegate the conduct of impersonation checks to a RtW DVSP.  

 

 
  • Update - July 17, 2026: As anticipated, on July 15, 2026, UK authorities issued a draft Employer’s Guide to Right to Work Checks providing examples, details of evidential requirements, and operational guidance on how employers and businesses liable to extended liability may establish and maintain a statutory excuse. We will update this alert when the final guidance is published.

Background 

On December 2, 2025, the UK government introduced primary legislation intended to expand the scope of its RTW Scheme by widening the definition of ‘employer’ beyond traditional employer–employee relationships. Secondary legislation was subsequently brought before Parliament in June 2026 to bring into force the expanded RTW scheme. The Code published now sets out how that expanded scheme will operate. 

Looking ahead  

Although the new Code provides significantly more detail on the operation of the expanded RTW Scheme, it also refers throughout to supporting employer guidance, including examples explaining how the new provisions are intended to operate in practice. This guidance is expected to be published before October 1, 2026.  We are monitoring the situation and will provide further updates as they arise.   

Fragomen can assist with internal audits and evaluations. Our dedicated WorkRight team also provides Digital Verification Service checks to make the process of validating right to work smoother. This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at  Fragomen.  

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