In this piece, the latest in our series of articles on impending changes to the civil penalty regime, we set out why it is important for businesses to understand the forthcoming updates and explain why they should take appropriate steps to prepare.
To understand more about the changes please see our previous articles on this topic at the links below:
- Introduction to the new regime
- An explanation of Direct Engagement
- An overview of Extended Liability (potentially the most significant change for many companies)
And in this article, we will focus on the risks of failing to comply.
The consequences of non-compliance
While there is no standalone legal requirement to carry out a right to work check in every circumstance, or to take steps to avoid illegal working across a supply chain, employers who fail to undertake the appropriate checks or follow the prescribed requirements, or who knowingly employ someone without necessary permission to work, can face significant sanctions, with both financial, and operation consequences.
(Please note that or the purposes of this article, we will use the generic term “employer” but please note that this term has been extended for the purposes of direct engagement (see our previous article) and “employer” will encapsulate businesses who engage wider groups of people, such as workers.)
Under the new guidance the Home Office can impose a civil penalty of up to £60,000 per illegal worker where an employer is found to have employed someone without first carrying out the required checks and establishing their right to work.
The consequences can be considerably more serious where an employer knowingly employs an illegal worker (or should reasonably have known that the person was an illegal worker). In such cases, criminal prosecution may follow, with a maximum penalty of five years’ imprisonment and/or an unlimited fine.
The potential repercussions do not stop there. Depending on the circumstances, enforcement action can also include business closure, director disqualification, and seizure of earnings. For employers, the reputational and operational disruption arising from enforcement action may be just as significant as the financial penalties themselves.
And for employers that hold a sponsor licence, non-compliance with broader right to work obligations can have consequences beyond a financial penalty. Failure to comply with the new requirements may result in action being taken against the employer’s sponsor licence, including its potential revocation. This could have a significant impact on an organisation’s ability to sponsor overseas workers in the future and, in turn, its ability to recruit and retain the international talent on which the business may depend. This could have a significant impact on an organisation’s ability to sponsor overseas workers and, in turn, its ability to recruit and retain the international talent on which its business may depend.
What should businesses do to prepare?
This is no longer a HR or onboarding issue. The changes to the civil penalty regime are far-reaching and require a coordinated effort across the business, including from the commercial, contract management, procurement, data protection, and people teams.
The guidance and code are still in draft form with less than a month to go before the changes take effect. While in theory this means the guidance and code could change, we expect that any further changes will not significantly alter the current content, and the current versions of the code and guidance should be used as a reference now. The guidance was updated on the 11th of September 2026 and the changes clarified some of the examples provided and introduced a new section on assessing whether arrangements are in scope of the new regime.
Businesses should therefore take a proactive approach to reviewing and strengthening their right to work processes ahead of the 1st of October 2026. This should include reviewing recruitment and onboarding procedures, auditing existing checks and records to ensure they remain compliant, and providing appropriate training to staff responsible for recruitment and compliance. Businesses should also conduct an audit of all individuals directly engaged, including subcontractors, workers, and others with non-traditional working arrangements, to see if those individuals are now in scope under the new regime.
Now that the provisions will catch wider groups, businesses should look at how individuals are engaged across the business, noting that not all individuals will be routed through the HR team (who will be most familiar with right to work checking requirements) before work begins. Appropriate systems, policies and procedures will need to be put in place to ensure all directly engaged individuals who come within scope are subject to a fully compliant check before work begins.
When required, employers will need to ensure that appropriate processes are in place to conduct a compliant check, whether by manual, online or digital means, as applicable, and that an appropriate imposter check is carried out.
Businesses should also conduct an audit of their wider commercial working arrangements to identify which contractual structures and onward supply chains may fall within the extended liability provisions.
Where those provisions bite, businesses must put in place the prescribed requirements (as set out in our previous article) and ensure their efforts can be suitably evidenced with the aim of avoiding any liability for illegal working in their supply chain.
As this is an entirely new requirement, this will require internal upskilling and training across the board on the new provisions.
Taking these steps now will help employers identify and address any gaps in their existing arrangements, manage potential areas of risk, and strengthen their overall right to work compliance and avoid any penalties.
Discuss your situation with our team
If you have any immediate questions or if you are concerned about whether your company may be affected by the changes to the law, please do not hesitate to contact our immigration team or our Commercial team today and we can discuss your specific situation to guide you through the changes you need to put in place to prepare.
Alex Christen
Partner
Business Immigration, Employment, Employment Investigations, Equality & Diversity, International
Alex is a Partner in our Employment and Immigration team. Alex leads the business immigration team, successfully supporting companies and individuals with immigration issues, including understandin... Read More
Tara is a Trainee Solicitor in our Employment & Immigration team. Tara Studied LLB Law at the University of The West of England.... Read More
