UK immigration enforcement has long focused on construction businesses. Reliance on contractors, subcontractors, labour agencies and temporary workers makes it challenging to ensure that everyone on site has the right to work in the UK.
From 1 October 2026, significant changes to the UK's Right to Work Scheme have increased the potential liability of businesses operating through complex contractual arrangements. Under the new extended liability provisions, businesses may face civil penalties for illegal workers supplied through other organisations, even where they have no direct contractual relationship with the individual concerned.
For construction companies, developers and principal contractors, the changes require a closer examination of supply chains, contractual arrangements and compliance procedures. Large construction projects often involve several layers of commercial arrangements. A principal contractor may appoint specialist subcontractors, who in turn engage labour suppliers or individual subcontractors to complete elements of a project. This structure can make it difficult to establish precisely who is working on site, which organisation engaged them and who is responsible for checking their immigration status.
Previously, businesses often assumed that responsibility for right to work checks rested primarily with the organisation directly engaging the individual. Although direct employers are still responsible for conducting the relevant checks, the new legislation extends potential civil liability to other businesses within specified contracting arrangements.
Illegal working can have profound consequences, including:
Civil penalties reaching £60,000 for each illegal worker.
Possible suspension or loss of a sponsor licence.
Disrupted construction projects and labour supply.
Damage to reputation and lost business opportunities.
Closer scrutiny by the Home Office and other stakeholders.
The extended liability provisions, introduced through the Border Security, Asylum and Immigration Act 2025, amend the Immigration, Asylum and Nationality Act 2006. Under the new section 15A, a business that is contracted to provide, or arrange for the provision of, work or services and subsequently enters into arrangements with another organisation to deliver those services may be treated as employing individuals further down the contractual chain. Importantly, this can apply regardless of whether the business has a direct contractual relationship with the individual or even knows that the individual is undertaking the work.
The legislation also recognises that contractual chains can involve multiple tiers. Consequently, potential liability is not necessarily limited to the organisation immediately above the individual supplying the labour. Consider a typical construction project. A developer appoints a principal contractor, which engages a specialist subcontractor. The subcontractor then obtains workers through a labour supply company.
If an individual working on the project is found to be working illegally, the organisation that directly engaged that individual may not be the only business exposed to a civil penalty. Other organisations within the contractual chain may also face liability where the statutory conditions are satisfied. However, extended liability is not automatic. Businesses must assess whether their contractual arrangements fall within the statutory framework.
Developers and project owners should not assume that they are automatically outside the scope of the new regime. Their exposure will depend on the nature of their contractual arrangements and whether they are contracted to provide, or arrange for the provision of, the relevant work or services.
Where developers appoint principal contractors who then engage multiple subcontractors, it is important to understand the structure of those arrangements and identify where potential liability may arise.
A review of procurement procedures, construction contracts and contractor management arrangements should form part of the wider compliance exercise. Contracts alone will not provide sufficient protection. Businesses looking to establish a statutory excuse against extended liability must pay particular attention to the prescribed contractual requirements.
The Home Office guidance highlights the importance of having proper written contractual terms in place before the work or services begin.
These arrangements should address:
Obligations requiring relevant parties to undertake prescribed right to work checks.
Restrictions and controls governing further subcontracting.
Rights to audit and obtain evidence of compliance.
Appropriate enforcement provisions where breaches are found.
Cooperation with Home Office investigations.
However, having suitable contractual wording is not sufficient by itself. Businesses must also prove that proper arrangements exist to ensure these requirements operate effectively in practice. This means that relying solely on assurances from a subcontractor or labour supplier may leave a business exposed.
Substitution provisions present an added compliance challenge. Where a contract allows one worker to be replaced by another, businesses must ensure that any substitute undergoes the proper right to work check before starting work.
They must also have effective identity verification procedures to establish that the person attending the construction site is the same individual whose right to work was checked. This is particularly important on large projects where workers may change frequently and site access is managed by several different contractors. Businesses should therefore consider whether their existing registration, identification and site access procedures provide sufficient assurance.
The October 2026 changes make immigration compliance a supply chain issue rather than simply an internal HR responsibility.
Construction businesses should consider taking the following steps:
Review contractual arrangements: Map every tier of contractors, subcontractors and labour suppliers involved in delivering projects.
Assess potential liability: Decide whether the extended liability provisions apply to the relevant contractual relationships.
Strengthen contractual protections: Ensure prescribed written terms are incorporated before work begins.
Audit suppliers: Introduce proportionate checks to establish that right to work procedures are being followed.
Improve site controls: Ensure workers and substitutes are properly identified and verified before accessing sites.
Maintain evidence: Keep proper records proving that contractual and operational compliance arrangements are effective.
The introduction of extended liability represents a significant development in the UK's approach to preventing illegal working. For construction businesses, the message is clear: responsibility may extend beyond the organisation that directly engages a worker.
Principal contractors, developers and other businesses involved in construction projects should review their supply chains and contractual arrangements without delay. Effective compliance will require more than contractual assurances; it will require demonstrable oversight, robust identity checks and properly implemented procedures.
By acting proactively, businesses can better manage immigration risks, safeguard their commercial interests and avoid potentially substantial civil penalties.
Ensure staff managing onboarding understand the updated requirements and procedures. If you need any further advice and help, please do not hesitate to contact the Quest Advice Line on 01455 852028.
