Your Contractors’ Workers Could Soon Be Your Compliance Problem: New Rules Coming October 2026

A business books in extra staff through an agency to cover a busy period. The agency does its own right-to-work checks, or so the business assumes. From 1 October 2026, that assumption could leave the business exposed to the same penalties as if it had employed those workers directly.

Section 48 of the Border Security, Asylum and Immigration Act 2025 widens who counts as an employer for illegal working purposes. It does not change how right to work checks are done. It changes who is on the hook when they are not done properly, and that now includes organisations further up the supply chain than most compliance policies currently reach.

What is actually changing

The Home Office checking routes stay exactly as they are. Document checks, Digital Verification Service checks and Home Office online checks all remain valid ways to establish a statutory excuse.

What changes is scope. Under the new definition, a business can be treated as responsible for workers it does not directly employ if those workers are supplied through a contractor, subcontractor, agency or outsourced service. This affects any organisation that uses labour supplied by a third party, not just certain sectors. The definition also reaches further than traditional supply chains. It extends to gig economy workers, zero hours and casual or temporary workers, and individuals engaged through online job matching platforms. Construction firms using subcontracted labour, retailers using agency staff, businesses relying on gig economy or platform-based workers, and companies further down a contract chain could all fall within this wider definition depending on how those arrangements are structured.

The question worth asking before October is not “do we employ this person?” It is “could we be treated as responsible for this person under the new rules?” For many organisations using agency, gig economy or contracted labour, the honest answer is currently unclear, and that is the gap worth closing now.

Alongside section 48, the Home Office has published a draft revised Code of Practice on preventing illegal working, also due to come into force on 1 October 2026. This Code is expected to set out the detail of how the wider definition applies in practice, including how different arrangements such as subcontracting, substitution and supply chains are treated, so it is worth reviewing once finalised rather than relying on the Act alone.

What has not changed, and what needs a closer look

The reforms do not create a separate legal category for agency workers, and they do not introduce personal liability for company directors.

Digital Verification Service Providers are a point worth being precise about. They are not being made mandatory for every employer. But any organisation that chooses to carry out right to work or right to rent checks digitally, rather than by manual document check, will be required to use a government-registered Digital Verification Service Provider. Businesses already using a digital checking tool should confirm now whether that provider is on the register.

The civil penalty regime remains in place, with fines of up to £60,000 per illegal worker for repeat breaches. What has changed alongside the civil penalty is the addition of potential criminal liability for illegal working arrangements falling within the new definition, not just a financial penalty. October 2026 is not only about a wider net of who can be fined. It also raises the seriousness of what is at stake for getting this wrong.

Why this matters more for sponsor licence holders

If your organisation holds a sponsor licence, an illegal working issue rarely stays contained to a civil penalty. UKVI treats right to work failures as a signal to look more closely at the rest of your sponsor compliance, including CoS assignments, record keeping and Right to Work processes across the board. A gap that starts as one contractor’s oversight can end up as a curtailment risk to the licence itself.

What to do before October

Map every arrangement where workers are supplied to you rather than employed by you directly, including agency staff, subcontractors, gig economy workers and outsourced services. For each one, find out in writing who is actually carrying out the right to work check and keep that evidence. If you use a digital checking tool, confirm it is on the government register of Digital Verification Service Providers before October. Review your contracts to see whether responsibility is clearly assigned, and make sure procurement and operational teams, not just HR, understand where the new rules touch their decisions.

The organisations that move on this before October will be the ones who never have to find out the hard way where the gaps were.