Historically, Right to Work compliance has primarily been viewed as an HR responsibility focused on onboarding employees.
That position is becoming increasingly difficult to sustain under the proposed reforms.
From October 2026, the proposed regime extends beyond direct employment relationships and reaches into worker contracts, subcontracting arrangements, online labour matching platforms and broader labour supply chains. As a result, organisations may face compliance exposure even where they are not directly engaging the worker concerned.
For many organisations, workforce compliance will need to become a coordinated, cross-functional business process rather than an isolated HR task.
A common misconception is that the reforms primarily affect organisations employing migrant workers directly.
However, the draft Code suggests a much wider impact.
The key question organisations should now ask themselves is not simply:
"Do we employ migrant workers?"
Instead, it should be:
"Do we know exactly how labour enters our business?"
The answer to that question may increasingly determine future compliance exposure.
One of the most operationally significant elements of the draft Code concerns contractual arrangements with labour providers, suppliers and contractors.
Businesses seeking to rely on the statutory excuse against extended liability may need far more than standard supplier warranties and generic compliance clauses.
The Home Office has prescribed specific contractual requirements that must be incorporated into relevant agreements and supply chain arrangements.
For HR teams, this creates an immediate need to work alongside Procurement, Legal and Contract Management colleagues to identify where contractual changes may be required before October 2026.
Review whether contracts:
✅ Require compliant Right to Work checks before workers commence assignments
✅ Extend obligations to all individuals falling within the expanded definition of employment
✅ Require evidence that compliant checks have actually been carried out
✅ Restrict further subcontracting without written approval
✅ Pass equivalent compliance obligations through the supply chain
✅ Provide visibility over who is ultimately supplying labour
✅ Allow compliance audits
✅ Permit access to evidence of completed checks
✅ Include practical audit procedures
✅ Allow services to be suspended
✅ Allow workers to be removed
✅ Provide termination rights
✅ Include escalation procedures for compliance concerns
✅ Require supplier cooperation with Home Office investigations
✅ Permit disclosure of relevant supply chain information
✅ Enable identification of other entities within the labour chain
Potentially, yes, but only to a point.
The draft Code suggests the Home Office expects organisations to take reasonable steps to verify supplier assurances and satisfy themselves that contractual obligations are being followed in practice.
In other words, compliance is increasingly becoming an "evidence-based" exercise.
Perhaps the single most important message emerging from the draft Code is that contractual wording alone will not establish a statutory excuse.
Organisations should be prepared to demonstrate:
Contracts remain essential, but contracts alone are unlikely to be enough.
In our previous article, we highlighted the new Home Office focus on substitution arrangements.
The draft Code suggests these may become one of the most significant hidden compliance risks facing organisations that permit contractors to substitute personnel.
Where substitution is allowed, businesses may need to ensure:
A simple but powerful question for organisations to consider is:
Could a substitute worker arrive on-site tomorrow without anyone knowing in advance?
If the answer is yes, the arrangement may warrant immediate review.
Many organisations may wish to review whether substitution rights remain commercially necessary in light of the additional compliance burden they now create.
The Home Office's focus is no longer limited to whether a Right to Work check was completed.
Increasingly, organisations may also need to demonstrate that the individual performing the work is the same person whose Right to Work was originally verified.
Examples may include:
This has important implications for organisations investing in workforce technology.
Businesses should begin assessing whether current systems provide sufficient visibility and evidential records to satisfy future compliance expectations.
Technology alone will not solve compliance challenges, but robust verification processes may become increasingly important in demonstrating compliance.
Perhaps the most important message emerging from the draft Code is that October 2026 should not be viewed solely as an HR policy update.
The potential consequences of non-compliance include:
For organisations operating complex labour supply chains, outsourcing arrangements or contractor-heavy workforce models, these risks are substantial.
Senior leadership teams should consider whether Right to Work compliance is appropriately reflected within existing governance structures, supplier management frameworks and internal audit programmes.
For some organisations, October 2026 may require a dedicated compliance project rather than a simple procedural update.
The organisations that manage this transition most effectively are likely to be those treating workforce compliance as a strategic risk management issue rather than a purely administrative requirement.
Waiting until 2026 is unlikely to be a sensible strategy.
Organisations have an opportunity to assess risks, review arrangements and implement controls before the reforms take effect.
Workforce Mapping
Contract Review
Substitution Review
Technology Assessment
Training
Audit Readiness
Generally, no.
The new categories of working arrangements are expected to apply to engagements commencing on or after 1 October 2026. Existing arrangements do not generally require retrospective checks, although organisations should review ongoing arrangements likely to continue beyond implementation.
Potentially, yes.
The emerging focus is increasingly on labour sourcing, contractor arrangements and supply chain visibility rather than simply direct employment relationships. Organisations using agency workers, subcontractors or outsourced labour should assess their exposure carefully.
In many cases, yes.
However, the Home Office is expected to consider the practical reality of the relationship rather than simply relying on contractual labels. Describing an individual as self-employed will not automatically remove compliance responsibilities.
Usually, the organisation with the direct contractual relationship with the worker remains responsible for the check. However, other parties in the supply chain may still face liability if they cannot demonstrate compliance with the prescribed requirements.
For many organisations, yes.
Contracts should be reviewed to ensure they contain appropriate Right to Work obligations, subcontracting controls, audit rights, enforcement provisions and Home Office cooperation clauses.
No.
The Home Office is likely to expect evidence of monitoring, audits, supplier oversight and compliance controls operating in practice. A contractual warranty alone is unlikely to be enough.
Treating these reforms as solely an HR issue.
The organisations most exposed may be those that fail to appreciate the wider implications for procurement, commercial contracting, supply chain governance, operational oversight and corporate risk management.