Written By Jonathan Palmer

What the New 2026 Right to Work Changes Mean for Your Business

The Right to Work rules are changing from 1 October 2026 – and they could affect far more businesses than ever before.

For years, many organisations believed Right to Work checks only applied to employees. From 1 October 2026, that changes significantly.

The Border Security, Asylum and Immigration Act 2025 expands the UK’s illegal working enforcement regime, bringing many organisations that engage contractors, freelancers and self-employed workers within the scope of civil penalties for the first time.

Whether you operate in recruitment, construction, logistics, engineering, healthcare, renewable energy or professional services, these changes mean it’s time to review your compliance processes.

At Honest Payroll, we help businesses stay compliant without creating unnecessary administration. This guide explains what is changing, who is affected and the practical steps you should take before the new rules come into force.

We also regularly publish practical guidance on contractor payroll, compliance and employment legislation in the Honest Payroll News Hub:
https://honestpayroll.co.uk/news-hub/

What Is Changing?

From 1 October 2026, the Government is widening the civil penalty regime relating to illegal working.

Previously, employers primarily had a legal obligation to carry out Right to Work checks on employees.

The updated legislation extends these obligations to organisations that engage individuals under:

Worker contracts
Individual subcontractor arrangements
Certain online matching or labour platform arrangements

In simple terms, if your business pays people to provide services—even if they are not employees—you may now have new legal responsibilities.

For many businesses, this represents one of the biggest changes to Right to Work compliance in years.

You can read more about the legislation on the UK legislation website:

https://www.legislation.gov.uk/

Why Has the Government Made These Changes?

The Government’s objective is to reduce illegal working by closing perceived gaps in employment models.

Increasing numbers of businesses engage people through:

Self-employed contracts
Freelance agreements
Umbrella arrangements
Labour providers
Digital platforms
Gig economy models

The new legislation aims to ensure organisations cannot avoid Right to Work responsibilities simply because someone isn’t technically an employee.

The Government’s increased focus on labour supply chains reflects a wider drive to strengthen compliance across payroll, umbrella companies and contractor engagement. Honest Payroll regularly covers these developments and what they mean for employers, recruitment agencies and contractors in our News Hub.

Who Could Be Affected?

The changes are particularly important for businesses that regularly engage:

Contractors
Freelancers
Consultants
Sole traders
Individual subcontractors
Temporary workers
Agency labour
Off-payroll workers

Industries likely to feel the greatest impact include:

Recruitment
Construction
Renewable energy
Logistics
Warehousing
Manufacturing
Hospitality
Healthcare
IT and technology
Professional services

If your workforce extends beyond traditional PAYE employees, it’s worth reviewing your current processes well before October.

What Are Right to Work Checks?

Right to Work checks confirm that an individual has permission to work legally in the UK.

A compliant check typically involves:

Confirming identity
Verifying immigration status
Checking original documentation or using approved digital services
Recording evidence correctly
Completing checks before work begins
Carrying out follow-up checks where required

Keeping clear records is just as important as completing the checks themselves.

The Home Office provides detailed guidance on completing compliant Right to Work checks:

Employers’ Guide to Right to Work Checks

Where appropriate, employers can also use the Government’s online Right to Work checking service:

https://www.gov.uk/check-job-applicant-right-to-work

Workers can also prove their Right to Work online using:

https://www.gov.uk/prove-right-to-work

What Happens If You Don’t Comply?

Businesses that fail to carry out compliant Right to Work checks could face significant consequences, including:

Civil penalties
Increased Home Office enforcement activity
Business disruption
Reputational damage
Loss of statutory excuse against civil penalties
Potential criminal investigation in the most serious cases involving knowingly employing illegal workers

Many organisations assume these risks only apply to HR teams. From October 2026, procurement, operations, finance and contract managers may also need to understand their responsibilities.

The Government’s current Code of Practice for employers is available here:

What About Contractors and Subcontractors?

This is where many businesses need to pay close attention.

If you engage an individual contractor directly, the new rules may require you to undertake compliant Right to Work checks before work begins.

Businesses relying heavily on self-employed labour should review:

Contractor onboarding
Supplier due diligence
Documentation processes
Record keeping
Internal responsibilities

Waiting until October could leave little time to implement compliant systems.

Recruitment Businesses Need to Prepare Now

Recruitment businesses are likely to be among the organisations most affected.

Many agencies manage complex supply chains involving:

Contractors
Temporary workers
Umbrella companies
Individual subcontractors
End clients

Ensuring everyone understands where compliance responsibility sits will become increasingly important.

If your business operates within the recruitment supply chain, keeping up to date with changing legislation is essential. Honest Payroll regularly publishes practical updates and compliance guidance for agencies, end clients and payroll providers:

https://honestpayroll.co.uk/news-hub/

Payroll Has a Bigger Role Than Ever

Payroll teams often become the central point where worker records, onboarding and compliance come together.

An effective payroll partner can help businesses:

Build compliant onboarding processes
Support worker verification
Maintain accurate records
Reduce compliance risk
Keep pace with changing legislation
Provide confidence during audits

Rather than viewing compliance as an administrative burden, it should become part of a well-managed onboarding process.

For more payroll compliance insights, visit the Honest Payroll News Hub.

Five Steps You Can Take Before 1 October 2026

1. Review Your Workforce

Identify everyone providing services—not just employees.

2. Map Your Engagement Models

Understand who works under employment, worker, contractor or subcontractor arrangements.

3. Review Existing Processes

Ensure Right to Work checks are completed consistently where required.

4. Train Your Teams

HR, payroll, procurement and hiring managers all need to understand the new requirements.

5. Seek Professional Advice

If you’re unsure how the legislation affects your organisation, getting expert guidance now can help avoid costly issues later.

Frequently Asked Questions

Q.Do these changes only affect employers?

A. No. From 1 October 2026, organisations engaging workers under certain worker contracts and individual subcontractor arrangements may also have legal responsibilities, even where no traditional employment relationship exists.

Q. Do I need to carry out Right to Work checks on contractors?

A. Potentially, yes. The answer depends on how those contractors are engaged. If your business regularly uses self-employed individuals or subcontractors, now is the time to review your onboarding processes.

Q. Can Right to Work checks be completed digitally?

A. Yes. In many circumstances, employers can use the Government’s online Right to Work service or certified Identity Service Providers (IDSPs), depending on the worker’s status.

Q. What is a Statutory Excuse?

A. A correctly completed Right to Work check can provide an employer with a statutory excuse against a civil penalty if it later transpires that the individual did not have permission to work. This protection only applies where the prescribed checking process has been followed correctly.

How Honest Payroll Can Help:

Employment legislation continues to evolve, and keeping up with every change can be challenging.

At Honest Payroll, we work with businesses, recruitment agencies and contractor supply chains to simplify payroll compliance and reduce administrative risk.

We can help you:

Review your current onboarding processes
Understand how the new Right to Work rules apply to your business
Strengthen payroll and compliance procedures
Support contractor and temporary worker engagement
Stay compliant as legislation changes

Our approach is practical, straightforward and designed to give you confidence that your payroll processes are supporting your wider compliance obligations.

Final Thoughts

The changes taking effect on 1 October 2026 represent a significant expansion of the UK’s Right to Work regime.

For businesses that engage contractors, freelancers or subcontractors, these new obligations shouldn’t be ignored.

Reviewing your processes now will put your organisation in a far stronger position before the legislation comes into force.

Compliance isn’t simply about avoiding penalties—it’s about protecting your business, your reputation and the people who work with you.

Every business is different. The way these new Right to Work requirements apply will depend on how you engage workers and structure your workforce.

Rather than waiting until October 2026, speak to Honest Payroll now and ensure your onboarding, payroll and compliance processes are ready.

Need Advice on the New Right to Work Rules?

If you’re unsure how these changes affect your business, Honest Payroll is here to help.

Our team can review your current processes, identify any potential risks and help you build a compliant onboarding and payroll framework ahead of the October 2026 deadline.

Contact Paul Gatenby
Global Account Director
📞 07734 864735
✉️ paul@honestpayroll.co.uk