The UK government is fundamentally changing how organisations must approach right to work checks. With legislative changes taking effect this summer the window for preparation is closing rapidly.
I am currently reviewing the government's draft guidance for businesses, which is likely to launch in May or June. This leaves very little time to get ahead of these critical updates. The scope of workforce compliance is widening far beyond traditional employment contracts, extending deep into the gig economy, freelancer networks, and complex agency supply chains.
For HR and talent acquisition leaders in medium to large enterprises, these updates represent a significant shift in strategic workforce planning. Understanding these changes is no longer just an administrative necessity; it is a vital component of protecting your organisation's reputation and financial stability.
Closing the loopholes on modern supply chains
The primary driver behind this impending legislation is the government's concern over compliance loopholes. Certain operating models have inadvertently - or sometimes intentionally - created extended supply chains that circumvent traditional right to work checks.
If your organisation is not the direct employer, the lines of responsibility can often become blurred. The Home Office has identified that this ambiguity creates back doors for illegal working, particularly within the gig economy and multi-tiered agency setups. The upcoming Border Security Act is designed specifically to close these doors, ensuring that every individual performing work is legally verified, regardless of their contractual status.
Expanding the scope of compliance
Historically, legislation has focused strictly on direct employees. The new rules intend to capture practically anyone doing work for someone else. This means your compliance strategies must urgently evolve to cover a much broader segment of your workforce. Under the new legislation, mandatory checks will likely apply to:
Freelancers and contractors
Agency workers
Subcontractors
Gig economy workers
Bank staff
If you engage someone to perform work, whether they operate on a zero-hours contract or a statement of work, they will fall under the new verification requirements. This requires a fundamental rethink of how you onboard contingent employees.
Navigating extended liability in your supply chain
The most complex challenge for HR leaders will be managing the new concept of the ‘contracting authority.’ This refers to the specific entity that contracts directly with the worker.
Consider a common scenario: a recruitment agency uses a second-tier agency, which then partners with an umbrella company to place a worker within your enterprise. Under the new rules, the umbrella company is likely the contracting entity responsible for the primary check.
However, the legislation introduces the critical concept of extended liability. Liability now flows up the supply chain. If that umbrella company fails to conduct a compliant check, the recruitment agency - and potentially you, the end client - could share the legal and financial burden.
You do not necessarily need to duplicate checks across every level of your supply chain, but you must have a robust, auditable defence. If an illegal worker is discovered within your network, every connected organisation must prove they had systems in place to prevent it. If your supplier fails to verify a worker, you need to prove you took reasonable steps to ensure their compliance.
The severe cost of getting it wrong
The financial and operational risks associated with non-compliance are severe and escalating. Penalties currently stand at up to £60,000 per illegal worker.
This operates on a sliding scale, typically starting at the maximum penalty. If you can demonstrate that you had strong, strategic processes in place and the failure was a genuine administrative error, the fine might be reduced. However, a lack of documented due diligence will leave you facing the top end of that scale. For an enterprise dealing with high-volume recruitment, a handful of unverified workers could quickly result in catastrophic financial penalties.
Furthermore, businesses holding sponsor licences face an even greater threat. Failure to comply with these new right-to-work regulations can lead to the immediate revocation of your licence, severely damaging your ability to hire essential overseas talent and execute inclusive, diverse hiring strategies.
Strategic steps HR leaders must take right now
Do not wait for the final guidance in May or June before taking action. To ensure your recruitment processes remain efficient, compliant, and inclusive, you must begin fortifying your supply chain immediately.
1. Map your entire workforce
Start by gaining complete visibility over who is working for your organisation and how they are sourced. Identify your direct recruits, agency workers, and any subcontracted staff. You cannot secure a supply chain that you do not fully understand.
2. Identify the controlling entities
For every worker, establish exactly who holds the primary contract. Determine whether the contracting authority is your internal HR function, a primary agency, or a third-party umbrella company. Clarity here is the first step in managing extended liability.
3. Establish robust due diligence
If you rely on third parties to source talent, review how you measure their compliance. Examine your existing contracts. You must introduce stringent audit processes, require explicit evidence of screening, and implement sample testing to verify that your partners are executing checks correctly.
Want to find out more about the changes?
Join us for an exclusive fireside chat with Keith Rosser, Director of Reed Screening and Chair of the Better Hiring Institute, as he unpacks the complexities of the upcoming changes to the UK's right to work checks.
The webinar is taking place on Wednesday 20 May 2026, at 12pm. Register for your free place here and get your questions answered.
