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Right to Work Checks in Contractor Chains

By Brian CrockerLast reviewed: 5 October 2026

A right to work check subcontractors requirement is the part of the 1 October 2026 change with the longest reach — longer than the widened definition of "employer" itself. It comes from the new extended liability provision. From that date, a business can be treated as employing someone it has no contract with, has never paid, and did not know was on site. If you are contracted to deliver work to a third party and you sub-contract the labour to do it, the people at the far end of that chain may become your penalty exposure.

This guide covers who extended liability reaches, who it does not, and the three things the Home Office expects you to have in place to establish a statutory excuse against it.

This guide is for informational purposes only and does not constitute legal advice. For advice on your specific situation, consult a qualified immigration solicitor.

The right to work check subcontractors rule: what extended liability actually says

Section 48 of the Border Security, Asylum and Immigration Act 2025 inserts a new section 15A into the Immigration, Asylum and Nationality Act 2006. The operative words:

"For the purposes of section 15, and where this would not otherwise be the case, A is to be treated as employing any individual ('B') who personally provides the work or services (or any part of the work or services), including where— (a) A is not in a contractual relationship with B, or (b) A does not know that B is providing the work or services (or part of the work or services)."

Two phrases carry the weight. "Not in a contractual relationship with B" — there is no privity requirement. "Does not know that B is providing the work" — ignorance is not, by itself, a defence.

The Act also makes clear the reach is not limited to the first contract down:

"Subsection (4) applies where A is contracted to provide, or arrange for the provision of, the work or services regardless of whether that contract is the first or any other contract in a chain of contracts"

And it preserves everyone else's liability alongside yours: "This section does not affect the liability of any other employer under section 15." Extended liability is additional, not a transfer.

The three situations that trigger it

Under section 15A, extended liability arises where:

  1. You are contracted to provide work or services to a third party and you contract with another business to provide or arrange that work. The classic labour-supply chain.
  2. You are an online matching service, you matched a service provider with a customer, and that customer contracted with the service provider. Note this is a different limb from the online-matching category in section 14A — here the platform is liable for the people the matched business sends, not just for the individual it matched.
  3. You employ someone under a contract that permits substitution, and someone else does the work in their place.

The third one is the quiet trap. Substitution clauses are common in contractor paperwork and are often inserted for employment-status reasons rather than operational ones. From 1 October, having one changes what you must control.

Where the line falls: two examples that look similar and are not

The Home Office's guidance for the new regime works through contract-chain scenarios. The pair worth internalising is the difference between passing work on and buying it in.

In scope — a logistics company. A retailer contracts a logistics company for warehousing and distribution. The logistics company outsources warehouse operations to a third party, which engages the workers. The logistics company is contractually responsible for delivering the service to the retailer and has outsourced the delivery of it. The guidance places the logistics company inside extended liability: it may be treated as the employer of anyone who personally does the work through that chain.

Not in scope — the retailer in the same example. The retailer is purchasing warehousing and distribution for its own operations and is not providing those services onwards to a third party. Extended liability does not apply to it.

Also not in scope — buying a service for your own premises. A retailer contracting a facilities management company to clean its own stores is purchasing a defined service for its own business operations, not arranging work onwards as part of a contractual chain. The facilities company employs the cleaners and carries the duty.

In scope — a construction company. A construction company wins a contract to build new homes and engages other businesses through a chain of contracts to supply the workers who lay the foundations and do the bricklaying. It is contractually responsible for delivering work to a third party and relies on a chain to fulfil it. In scope.

The distinguishing question is not how many tiers there are or how big the contract is. It is: am I passing this work onwards to satisfy an obligation I owe someone else, or am I consuming it myself?

One reassurance on scale. The guidance says the Home Office "will ordinarily seek to identify the person responsible for the relevant contractual arrangements and determine whether that person has established a statutory excuse, rather than treating every party in a contractual chain as liable." The intent is to find the responsible party, not to issue penalties up and down a chain simultaneously.

Establishing a statutory excuse against extended liability

Because you are not the one running the check on the worker, the statutory excuse works differently. The requirements are set in legislation: SI 2026/700 inserted them into the Immigration (Restrictions on Employment) Order 2007 as a new article 5B with effect from 1 October 2026, and the Home Office's guidance explains them. You must comply before the work commences and be able to evidence that compliance if asked. There are three.

1. Contractual terms and conditions

A written statement, in place before the work starts, requiring the employer or service provider you contract with to:

  • carry out prescribed right to work checks on any individual employed to perform the work;
  • not sub-contract further without your prior written consent, and to replicate equivalent right to work obligations in any permitted sub-contracting;
  • permit you to audit their compliance with the prescribed checks;
  • enable you to take enforcement action — suspension or termination among others — where illegal working is identified and no statutory excuse has been established, and carry equivalent enforcement provisions into their own contract with the individual doing the work; and
  • co-operate with any Home Office investigation, including by providing the make-up of the chain of contracts, the identity and registration details of each business in it, and anything else the Home Office considers relevant.

You may rely on assurances from businesses in the chain that checks have been carried out, but only where you have taken reasonable steps to satisfy yourself that those assurances are reliable.

2. Substitution controls

Where a contract permits substitution, you need processes — again, before the work starts — ensuring that a prescribed check is carried out on any substitute, that responsibility for that check is not delegated to the individuals doing the work, that nobody works as a substitute before their right to work has been verified, that you have contractual remedies where illegal working is known or suspected, and that the worker and their registered substitute remain the same individuals whose right to work you checked.

That "not delegated to individuals carrying out the work or services" point is the one most likely to require an operational change — and the guidance adds that it applies "including where the contractual arrangement describes that individual as operating in business on their own account". A model where a contractor arranges and vets their own cover will not establish the excuse.

3. Identity verification

Proportionate systems ensuring the person doing the work is the person who was checked. The guidance offers examples: identity cards or workplace passes, facial recognition including through registered providers, biometric or attendance management systems, checks against training or licence records, and re-verification at set intervals. On frequency it says the Home Office recommends re-verification "at least once in any 24-hour period or shift of work", with the frequency proportionate to the work and the risk of substitution.

What the Home Office will look at

The guidance is explicit that paperwork alone will not carry it: a business "should not rely on contractual terms alone" and should be able to show that arrangements are "operating effectively in practice". The listed evidence includes copies of agreements and terms, audit records, assurance information received from businesses in the chain, records of compliance reviews, and information showing how concerns were identified and acted upon.

In other words: the excuse is a live compliance process with a paper trail, not a clause. Our record keeping guide covers the standard the Home Office already applies to direct checks, and the same retrievability expectations will apply here.

Cost of getting it wrong

Unchanged, and per worker. A first breach starts at £45,000 per illegal worker and a repeat breach within three years at £60,000, before any reductions — see how the civil penalty is calculated for how mitigation works. The difference under extended liability is arithmetic: a chain with forty workers in it is a very different exposure from a payroll of eight. The penalty risk calculator works on the count of people without current checks, so include sub-contracted labour when you use it.

A practical sequence

  1. Map where you sit. For each significant contract, ask whether you are delivering work onwards to a third party or consuming it yourself. Only the first puts you in extended liability.
  2. List the chains. For each in-scope contract, write down who you contract with, who they contract with, and whether you know who actually turns up.
  3. Find your substitution clauses. Search contractor agreements for substitution or "right to send a suitably qualified replacement" wording. Each one needs the control set above or removal.
  4. Draft the written statement once, not per contract. The required terms are the same across suppliers; a standard schedule is easier to apply consistently than bespoke drafting.
  5. Decide how you will verify identity on site — pass, biometric, attendance system, or re-verification at the start of a shift — and pick something proportionate to your actual risk rather than the most elaborate option.
  6. Extend your self-audit to the chain. If you already audit your own right to work records, add a column for sub-contracted labour and assurance evidence.
  7. Act on the final guide now. The prescribed requirements above are fixed in regulations (SI 2026/700) that took effect on 1 October 2026, and the Home Office's explanatory guide has been final since the same date. It applies the requirements to contractual arrangements entered into on or after 1 October 2026, and it requires the written statement to be in place "before the work or service commences". So put the written statement and the substitution controls in place for those arrangements, and review any supplier contract entered into since 1 October that went ahead without them.

The bottom line

From 1 October 2026, section 15A can treat you as employing people you never contracted with and did not know about, where you are passing work down a chain, operating an online matching service, or permitting substitution. The statutory excuse is available but it is not a clause — it is contractual terms, substitution controls and identity verification, all in place before the work starts and evidenced in practice. Start with the map: are you passing work on, or buying it in? Everything else follows from that answer. For the wider picture of what changed on that date, see our guide to the 1 October 2026 rules, and for the direct-engagement categories see right to work checks for gig and casual workers.

Sources

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