Right to work checks: extended liability for organisations from 1 October 2026

The extended liability regime does not capture every organisation that uses work or services from another business. Several categories are expressly excluded:

• End users, clients and customers – If your organisation is simply using a service for its own internal operations, and is not responsible for providing those services onwards to a third party, the extended liability provisions do not apply.

Examples: (1) A retailer contracts a facilities management company for cleaning across its stores is an end user – in this instance, responsibility remains with the facilities management company as the direct employer of the cleaners. (2) The same principle applies to a manufacturer that takes on temporary production workers from an employment business to cover increased demand – the manufacturer is integrating those workers into its own operations, not providing them onwards, and is therefore out of scope.

• Genuinely self-employed individuals and personal service companies – Individuals operating an independent business in their own name, or through their own company, who contract directly with clients or customers for the provision of goods or services fall outside the regime.

Example: A self-employed plumber sourcing work from multiple customers, or a graphic designer engaged through their own personal service company on a business-to-business basis, would not trigger a right to work check obligation on the part of the client.

• Supply of goods – Where a contract is for the supply of finished goods rather than work or services, the extended liability provisions do not apply.

Example: A food producer supplying sandwiches to a retailer is supplying a product. The workers in the factory are engaged in the producer's own operations, and liability sits with the employment business that supplied them.

The underlying principle is clear: extended liability is targeted at arrangements where work or services are passed along a contractual chain, not at arm's-length procurement of goods or services for internal consumption.

The new provisions bring several categories of arrangement within scope, each carrying potential exposure where right to work checks have not been properly conducted.

• Worker’s contracts – This refers to a contract (other than a contract of service or apprenticeship) under which an individual undertakes to perform work or services personally for an organisation and the organisation is not a client or customer of any profession or business carried on by the individual. In practical terms, this means the individual must do the work themselves (rather than being free to send a substitute) and they are not genuinely operating their own independent business of which the organisation is simply a customer.

Example: An individual is registered with an employment business which supplies temporary workers to bars and restaurants during busy periods. The individual is engaged by the employment business on a contract for services and accepts short-term hospitality assignments when offered. The employment business is the individual’s employer for the purposes of the right to work scheme and is therefore responsible for the right to work check.

• Subcontracting chains – Where a business is contracted to deliver work or services to a third party and subcontracts some or all of that work to other businesses, the extended liability provisions apply.

Example: A construction company that wins a contract to build new homes and engages other businesses through a chain of contracts (e.g. for bricklaying, foundations, and the like) may be treated as the employer of any individual personally carrying out work through that chain. The liability is not limited to a single tier; it can cascade through every level of subcontracting.

This has obvious implications for sectors such as construction, logistics and facilities management, but it will also be relevant wherever outsourcing arrangements involve the onward delivery of services. Commercial contracts in those chains will need to be re-examined.

• Online matching services – Platforms that, in the course of a business, maintain a register of service providers and match them with potential clients or customers for a fee or commission will be treated as the employer of any worker who carries out the services.

Example: A homeowner uses an online matching service to find an electrician. The matching service connects them, and the homeowner contracts directly with the electrical business, but the matching service may nonetheless be treated as the employer of the worker who turns up to do the job.

Gig economy platforms are an obvious target here, but any business operating a marketplace model should assess whether it falls within the definition.

• Substitution arrangements – Where a contractual arrangement between an employer and a worker permits substitution, meaning that it allows the worker to send someone else to carry out the work in their place, the employer may be treated as employing both the original worker and any substitute.

Example: A food delivery platform whose riders are engaged as independent contractors with the right to substitute is a clear example: the platform is potentially liable for the right to work status of every substitute who makes a delivery.

Substitution clauses are common in consultancy and contractor arrangements and are often used in employment and tax law analysis to demonstrate genuine self-employment. Businesses that have relied on such clauses for IR35 or worker status purposes should now consider their illegal working exposure.