Right to Work Is Now a Supply Chain Issue

The 1 October 2026 changes, and why they matter if you place, supply or manage labour

For years, right to work compliance sat with HR and applied to employees. Since 1 October 2026, it has become a supply chain and workforce risk issue. If your business engages contractors, agency workers or subcontractors, the rules now apply to you in ways they didn’t before.

The Right to Work Scheme now covers:

• Workers engaged under a worker’s contract, including agency workers
• Individual subcontractors
• Online matching and platform arrangements

It also introduces extended liability. Where work is passed along a chain of contracts, a business higher up can face a civil penalty for illegal working further down, even without a direct relationship with the worker.

Genuinely independent businesses, trading on their own account for several customers, remain outside the checks. But the label “self-employed” is no longer enough. What matters is how the person actually works.

Agencies, umbrella companies and labour providers sit in the middle of these chains. Three points stand out:

• You can’t assume someone else has done the check. If a partner in your chain is carrying out checks on your behalf, verify that their process meets Home Office requirements.
• Contracts matter as much as process. To protect yourself against extended liability, the required written terms must be in place before work starts.
• Your providers matter. Digital checks must be run through a registered right to work digital verification service provider. A registered provider that isn’t certified for right to work doesn’t give you protection.

Civil penalties run to £45,000 per illegal worker for a first breach and £60,000 for repeat breaches, and they are per worker. For businesses with sponsor licences, there are further consequences. Reputational damage often costs more than the fine.

The new rules apply to engagements starting on or after 1 October 2026, which includes new workers joining existing arrangements.

1. Map every way you engage labour, and who sits where in the chain.
2. Update contracts and onboarding terms for extended liability.
3. Complete checks before work begins and keep evidence you can produce on request.
4. Confirm every digital provider in your chain is registered and certified.
5. Build follow-up checks into your process.

Indigo Group provides commercial contracting and intermediary services in construction and a variety of other sectors, Right to work checks on a secure online platform powered by Credas, a certified right to work digital verification service provider, are a standard part of what we do. Checks are quick for the individual, results are clear, and records are stored securely and available at any time.

If you’d like to understand where your labour supply chain stands, get in touch with our Business Development Team.

For more information visit – gov.uk