New right to work changes – October 2026

Changes to right to work (RTW) checks rules – the key points to understand for co‑operative societies: 

• Right to work checks for workers are required.  
• Under the new extended liability, a society could be fined for illegal working by people it doesn’t employ directly, where the society subcontracts work it has agreed to provide to its own customer – rather than services it buys in for itself – and the Home Office cannot identify the business that actually employs the worker. The society can protect itself by carrying out the new extended liability RTW check. 
• If you are using a right to work digital identity provider, you must ensure that the provider is registered. 

What were the previous rules?

Societies were subject to a fine of up to £60k if they negligently employed someone who was working illegally under a contract of employment. However, they were not required to pay the fine if they could show that they had completed RTW checks prior to employment, in line with Home Office guidance.

What has changed? 

From 1 October 2026, there are now two types of liability for illegal working: 

1. Direct liability for: 

• Employees – people working under a contract of employment, e.g. permanent or fixed‑term staff on payroll.
• Workers – people who work for the society but aren’t employees, e.g. casual, zero‑hours or bank staff. This applies even if they can turn down shifts. 
• Self‑employed individuals who aren’t genuinely running their own business – e.g. an IT trainer described as ‘self‑employed’ who in practice works much like a member of staff. The label doesn’t decide this – what matters is how the arrangement works in practice. 

People who are genuinely self‑employed and running their own business, whether as a sole trader or through their own company, and who contract with the society as a customer, are outside the new rules. 

2. Extended liability for: 

• Substitutes appointed by workers/self‑employed individuals – e.g. Jack, a delivery driver, asks Jill to cover his work. 
• Illegal working within chains of contracts/sub‑contracts used to deliver services/goods involving staff to a customer/client – e.g. providing logistics to another retailer. 

The extended liability provisions do not automatically transfer liability for another company’s failure to carry out RTW checks. However, if the Home Office can’t identify the direct ‘employer,’ they may look upstream in the chain of contracts. 

Although not applicable to most societies, liability will also extend to online businesses that match individuals to available contracts for a fee, (e.g. Fiverr) or offer work via an app (e.g. Uber). 

What contractual arrangements are out of scope? 

Home Office guidance says RTW checks will not be required for: 

• Self‑employed people who contract in a business capacity to provide goods or services to your society (including those using a Personal Services Contract) – e.g. a plumber. 
• Sub‑contracting arrangements where the services are for your own society – e.g. facilities management of your own retail store. 
• Agency contracts to provide staff to be used within your own society – e.g. cleaning staff. 
• Agency contracts where there is no delivery of work or services (only staff). 

Has the process of right to work checks changed? 

For a direct relationship with an employee, worker or self‑employed individual, the physical/online process for completing a RTW check has not changed. However, if your society is relying on a digital identity provider, this provider must now be a registered ‘’RTW DVSP’ (Right to Work Digital Verification Service Provider). 

For extended liability, businesses can protect themselves by having in place:  

1. Contractual terms for subcontracts: right to work checks to be carried out, no further subcontract without consent, audits, non‑compliance penalties, co‑operation with any Home Office investigations.  
2. Contractual terms for substitution clauses: RTW checks to be completed on the substitute by the ‘employer’ before any work delegated and for the duration of employment the employer must ensure the worker and substitute remain the same. 
3. Identity checks during the life of the contract on substitutes and subcontractors to prevent RTW fraud. This should be proportionate to the business but could be identity card, rechecking identity (not RTW) or facial recognition. This will be applicable to the types of relationships qualifying for extended liability. 

Checklist 

1. Conduct an audit of employment status to ensure you know who qualify as employees, workers and self‑employed staff. 
2. Consider checking self‑employed staff to minimise potential liability if there is an ability to substitute a replacement in their absence. 
3. Review any digital identity provider to ensure it is a listed provider. 
4. Review substitution and where it can occur. Consider how best you can recheck their identity. 
5. Ensure procurement understand where a risk may arise and the clauses/processes needed. 

You can view the new employers guide to right to work checks here. Remember that many questions will be raised by employers due to the complexity of the rules. We may see guidance alter and further clarification provided. 

If you require further guidance, please contact [email protected].