From 1 October 2026, under the Border Security, Asylum and Immigration Act 2025, the Right To Work (RTW) scheme and the meaning of “employer” have been expanded for the purposes of the civil penalty provisions under the Immigration, Asylum and Nationality Act 2006.
It now covers individuals i.e.: PAYE temps, so that if the recruitment business has a direct contractual relationship with an individual, it may be treated as that individual’s employer for RTW purposes and should carry out a prescribed RTW check before work begins. Where the contractor supplies services through a genuinely independent personal service company, i.e.: Limited company contractor, the arrangement should fall outside the direct RTW Scheme.
It now requires a recruitment business to:
- complete a prescribed RTW check before the individual starts work;
- check that the individual is permitted to carry out the particular work in question;
- retain the required evidence;
- conduct any required follow-up check where the individual has time-limited permission;
- verify that the person performing the work is the person whose RTW was checked; and
- take appropriate action if it knows or has reasonable cause to believe that the individual is working illegally.
A compliant check gives the recruitment business a statutory excuse, meaning a defence against liability for a civil penalty if the individual is subsequently found to have been working illegally.
The statutory excuse will not protect the recruitment business that knows that the individual does not have permission to perform the work in question.
Extended Civil Penalty Liability
It also introduces potential extended civil penalty liability within some contractual supply chains. Extended liability may arise where a recruitment business has contracted to deliver work or services to a third party and engages another recruitment business or employer to provide workers to fulfil that obligation. This applies to managed services providers, outsourced services providers, subcontracting chains and some statement of work arrangements.
It won’t matter what the contract is called, the Home Office will consider:
- who is contractually responsible for the work or services;
- whether the arrangement is for labour or a defined service;
- whether services are being provided onwards to another party;
- the purpose and structure of the contractual chain;
- who engages and supplies the individuals;
- who approves or replaces the individuals;
- whether substitution is permitted; and
- how the arrangement operates in practice.
The statutory excuse against extended liability
The direct employer obtains its statutory excuse by carrying out the prescribed Right To Work check.
A party exposed to extended liability under a non-direct contractual arrangement i.e.: managed services providers, outsourced services providers, subcontracting chains and some statement of work arrangements, obtains a different statutory excuse. They must be able to demonstrate compliance with prescribed requirements concerning:
- written contractual terms;
- substitution controls, where relevant; and
- identity verification.
The Home Office indicates that it will ordinarily seek to identify the party responsible for the relevant contractual arrangements, rather than treating every party in a chain as automatically liable. However, if the direct employer cannot be identified and the prescribed requirements have not been met, liability may extend upstream.
If you have any questions about what you need to do, please don’t hesitate to contact me on lucy.tarrant@cognitivelaw.co.uk or call 0333 400 4499.