Gig Economy and Construction Right to Work Rules: What Changes on 1 October 2026

Key Takeaways

• From 1 October 2026, the duty to carry out Right to Work checks extends beyond employees under Section 48 of the Border Security, Asylum and Immigration Act 2025, bringing many contractors, agency workers and gig and platform workers into scope for the first time.
• Genuinely self-employed people who are in business on their own account, contracting directly with their own clients, remain outside the scheme. The real risk for most businesses is misclassifying someone as self-employed when they are not.
• Construction has been singled out by the Home Office as a high-risk sector. Because so much of its workforce is self-employed through CIS, it faces an estimated 2.7 million extra checks and is one of the most exposed industries.
• Responsibility usually sits with the party that has the direct contract with the worker, but liability for a civil penalty can move up the supply chain. The Home Office will look at the contractual arrangements and how far each party complied.
• Where a contract allows substitution, you must make sure a prescribed check is carried out directly for any substitute before they start. That responsibility cannot be delegated to the worker.
• Penalty amounts are unchanged but now apply to a far wider group: up to £45,000 per worker for a first breach and £60,000 for repeat breaches, with criminal liability of up to five years' imprisonment and an unlimited fine in serious cases.
• A new Code of Practice applies from 1 October 2026. You cannot rely on digital checks alone, and where you do use a digital verification service for an eVisa holder, it must be certified for Right to Work on the OfDIA register.
• This is exactly the kind of cross-workforce tracking software is built for. WPC HR's compliance platform records checks for employees and contractors alike with a tamper-evident audit trail and expiry alerts, and our Sponsor Licence Compliance Audit gets your process ready before the October deadline.

Introduction

For most of the last decade, Right to Work checks were something you did for employees. If a person was genuinely self-employed, or engaged through an agency or a platform, the legal duty to check usually sat somewhere else, or nowhere at all. That changes on 1 October 2026. From that date, the Right to Work scheme reaches deep into contractor, agency, gig and platform arrangements, and the civil penalty regime follows it there.

For labour-heavy sectors, and construction above all, this is one of the most significant compliance shifts in years. It is also a cross-functional problem: HR, procurement, operations and finance all touch the arrangements now being pulled into scope. This guide explains exactly what is changing, who is caught and who is not, why construction and the gig economy are in the spotlight, how liability works across a supply chain, and the practical steps to take before the deadline. For the wider employer picture, our group's complete guide to Right to Work checks for UK employers is a useful companion.

What Is Actually Changing on 1 October 2026?

The change comes from Section 48 of the Border Security, Asylum and Immigration Act 2025, which comes into force on 1 October 2026. Until now, the illegal working civil penalty regime applied mainly to people working under a contract of employment. Section 48 extends it to a much wider set of working relationships, so that the businesses engaging that labour must carry out a prescribed Right to Work check, or risk a penalty, just as an employer would for a member of staff.

Alongside the legislation, the Home Office has issued a revised Code of Practice that applies from the same date. It sets out how the wider scheme works in practice, including for arrangements involving substitution clauses and contractual chains, and it applies to engagements starting on or after 1 October 2026 and to follow-up checks carried out after that date. The message from government has been direct. Home Office minister Alex Norris described the reforms as extending the scheme, for the first time, to cover companies who contract workers or individual subcontractors to provide services under their company name, such as agency workers or workers in the gig economy.

Who Is Now in Scope, and Who Is Not?

The simplest way to think about it is that the check follows the individual providing their labour, rather than the job title on the contract. The table below sets out the main groups.

The Genuinely Self-Employed Exemption, and the Misclassification Trap

The exemption for genuinely self-employed people is real, but narrower than many businesses assume. It protects people who are truly in business on their own account: trading in their own name or through their own company, working for a range of clients, controlling how they carry out the work, and contracting directly rather than being placed into someone else's workforce. A plumbing firm you hire to fix a leak is providing a service. A person you engage to work on your site, under your direction, alongside your staff, usually is not, even if they invoice you as a sole trader.

This is where the real exposure lies. If you treat someone as self-employed and outside the scheme, but the reality of the arrangement is closer to personal service under your control, you may be caught after all, and without a check you have no statutory excuse. Employment status is judged on substance, not labels, so the safest approach is to look hard at how each arrangement actually works rather than relying on how the contract is described.

Construction in the Spotlight: Why the Sector Is Most Exposed

Construction has one of the highest rates of self-employment of any UK sector, much of it channelled through the Construction Industry Scheme (CIS). That model, built around large numbers of individual subcontractors moving between sites and firms, is exactly what the new rules reach into, which is why the Home Office has named construction a high-risk sector for enforcement.

The scale is significant. Industry figures suggest that if hundreds of thousands of freelancers and operatives each work for several clients a year, the sector could face millions of additional checks annually, each carrying a cost in time, money and potential delay in getting people onto site. Some large payers of subcontractors have already carried out tens of thousands of compliant checks ahead of the deadline. Two points matter most for construction firms. First, a genuinely self-employed CIS subcontractor in business on their own account may still fall outside the scheme, but that judgement must be made carefully, because misclassification transfers the risk back to the engaging business. Second, roughly half of businesses believe they already carry out Right to Work checks, yet many of those checks would not actually provide a statutory excuse. Doing something is not the same as doing the prescribed check correctly.

The Gig Economy and Platform Work

Delivery riders, ride-share drivers and other platform workers are squarely within the reforms. Many platforms have historically treated these individuals as self-employed and built onboarding models that did not include a Right to Work check. From 1 October 2026 that will no longer be safe, because the businesses that engage or match this labour will generally need to ensure a prescribed check has been carried out.

Substitution is the particular pressure point for the gig economy. Where an app or contract allows one person to send someone else to do the work, the engager must ensure that a Right to Work check is completed directly for that substitute before they begin, and cannot leave it to the original worker to check their own replacement. Building identity and Right to Work verification into the platform onboarding flow, for both primary workers and substitutes, is the only reliable way to manage this at volume.

Contractual Chains and Substitution: Where Liability Sits

In a simple arrangement, responsibility for the Right to Work check rests with the party that has the direct contractual relationship with the worker. In a labour supply chain, it is rarely that simple. The Home Office has said it will have regard to the nature of the contractual arrangements and the extent to which each party has complied with the requirements when deciding who should bear a civil penalty. Where the direct employer cannot be identified, liability can pass up the chain to a contracting business further up.

Substitution clauses need specific attention. Where a contract permits a worker to be substituted, the engaging business must have processes ensuring that a prescribed check is carried out directly on any substitute before work begins, that this responsibility is not delegated to the individuals doing the work, and that no substitute starts before their Right to Work is verified. The practical protection is contractual as well as procedural: require the party you contract with to carry out compliant checks, prohibit further subcontracting without your written consent, replicate the same Right to Work obligations at every tier, and back it with indemnities. These provisions are not limited to a single tier, so they need to flow all the way down the chain.

How to Check, and What the New Code of Practice Requires

The methods themselves are the familiar ones. A compliant check is carried out through one of three routes: an online check using a share code, a manual document check, or a digital identity check through a certified Digital Verification Service. For workers with pending applications, the Employer Checking Service provides a Positive Verification Notice. Whichever route applies, the check must be completed before the person starts work, and a dated copy retained for the length of the engagement plus two years.

Two points in the new Code of Practice matter especially for engagers of contract and gig labour. First, you cannot rely on digital checks alone as a blanket solution, so your process must accommodate manual and online checks as well. Second, where you do use a digital verification service for someone with an eVisa, that provider must be certified for Right to Work checks on the Office for Digital Identities and Attributes register, not merely registered for identity checks. The free Home Office share-code service remains available and is unaffected. For a step-by-step walkthrough of the most common route, see our companion guidance on Right to Work share-code checks.

What to Do Before 1 October 2026

This is a cross-functional exercise, not an HR-only task. The following steps will put most organisations in a defensible position before the deadline.

1. Map your workforce. Identify everyone who provides labour to your business, not just employees: contractors, agency workers, CIS subcontractors, platform and gig workers, and anyone engaged through a supply chain.
2. Test employment status honestly. For each arrangement, assess whether the person is genuinely self-employed or is really providing personal service. Where in doubt, treat them as in scope and check.
3. Review and update contracts. Add Right to Work obligations, substitution controls, a bar on further subcontracting without written consent, and indemnities, flowing the same terms down every tier of the chain.
4. Brief procurement and operations. Make sure the people who engage labour and sign supplier agreements understand the new duty, so compliance is built in at the point of engagement.
5. Set up a compliant checking process. Decide how checks will be carried out and recorded, cover substitutes, and make sure any digital provider you use is certified for Right to Work on the OfDIA register.
6. Centralise records and diarise expiries. Store dated evidence securely for the engagement plus two years, and track time-limited permissions so follow-up checks are never missed.

Penalties and Enforcement

The financial exposure is the same headline figure that already applies to employees, but it now reaches a far larger population of workers. Businesses that fail to carry out a required check face a civil penalty of up to £45,000 per worker for a first breach and up to £60,000 for repeat breaches. In serious cases, where a business knew or had reasonable cause to believe a person did not have the right to work, sanctions escalate to criminal conviction, a prison sentence of up to five years and an unlimited fine.

With enforcement raids already at record levels and construction named as a priority sector, the practical likelihood of being checked has risen sharply. The full penalty framework is set out in the Home Office's guidance on penalties for employing illegal workers, and the underlying rules on how to check are in the employer's guide to Right to Work checks.

How Can WPC HR Help?

The October 2026 changes turn Right to Work from an HR onboarding step into a whole-workforce, whole-supply-chain obligation, which is very hard to manage on spreadsheets. WPC HR's HR compliance software records Right to Work checks for employees and contractors alike, stores tamper-evident evidence, tracks every expiry date with automated alerts, and flags gaps on a compliance dashboard so nothing slips through as your engagement models change. If you would like a specialist to pressure-test your process and existing files against the new Code of Practice before the deadline, our Sponsor Licence Compliance Audit gives you a prioritised, practical plan to get ready.

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Conclusion

The 1 October 2026 reforms redraw the boundary of the Right to Work scheme. The check no longer stops at your employees; it follows the people who provide labour to your business, wherever they sit in the contractual picture. For construction firms and platform operators especially, that means treating contractors, subcontractors, agency and gig workers with the same rigour as staff, and looking honestly at which arrangements are genuinely self-employed and which are not.

The organisations that will handle this well are the ones that start now: mapping their workforce, tightening contracts, briefing procurement and operations, and putting a consistent, well-recorded checking process in place across the whole chain. Handled properly, this becomes a manageable part of engagement rather than a source of six-figure liability. Where you want the reassurance of software that tracks every worker and an expert review before the deadline, WPC HR can take the manual effort and the risk out of getting ready.

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