An extended right-to-work framework that extends beyond traditional employment relationships will take effect from tomorrow, 1 October 2026, and retail businesses are in the Government’s spotlight.
Where previously employers were only responsible for direct employees, the new regime will mean they are now responsible for ensuring agency staff, contractors, sub-contractors, gig economy platforms and service providers introduced through fee-charging online matching services have a legal right to work in the UK.
Businesses that fail to complete right to work checks face stiff penalties of £45,000 per employee, rising to £60,000 for repeat offences.
“This represents a major change for businesses built on flexibility, seasonal demand, agency staff, contractors and last-minute shift cover, and the implications are significant," said Naomi Goldshtein, a partner at global immigration and mobility advisers Fragomen.
“The starting point is to know your workforce. Employers will have strong visibility over direct employees but less oversight of agency workers, contractors, subcontractors and other contingent labour.
“Businesses must understand who performs work or services, the contractual basis on which they do so and how they entered the workforce. Simply stating that another party is responsible for checks will not be enough.
“Checks must be completed using an approved method, including manual, Home Office online or certified digital verification routes where appropriate.
“Businesses that fail to comply may face civil penalties, operational disruption, reputational damage and, where they hold a sponsor licence, wider compliance consequences. Civil penalties for first breach start at £45,000 per illegal worker rising to £60,000 for repeat offenses. Serious cases may result in criminal prosecution, with a potential prison sentence of up to five years and an unlimited fine.”
Fragoman has created a handy checklist for employers in the retail sector. Employers should:
- Map every workforce category and contractual route, not just employees.
- Identify worker’s contracts, individual subcontractors, online matching arrangements and contracts permitting substitution.
- Review agency, outsourced service and labour-supply chain arrangements.
- Determine whether direct checking duties or extended liability provisions apply.
- Review contracts for appropriate Right to Work terms, audit rights, substitution controls and identity-verification requirements.
- Ensure nobody within the expanded checking categories starts work without the required check.
- Train HR, recruitment, procurement and operational teams.
- Review onboarding, escalation and record-retention procedures.
- Consider whether a certified digital verification service provider could support compliance at scale.