Right to work changes: what does the new legislation mean for employers, developers and contractors in the construction sector?

Effects of the new legislation

For the construction industry, the main impact of the new ‘right to work’ legislation, the Border Security, Asylum and Immigration Act 2025 (the ‘Act’), is the extension of the UK’s illegal working and right-to-work compliance regime throughout the contractual supply chain.

This is because section 48 of the Act extends liability for right to work checks to a wider range of working arrangements, including:

• individual subcontractors;
• workers engaged under contracts for services rather than employment contracts;
• labour supplied through contractual chains; and
• certain platform or agency workers.

Further, and importantly, liability generally now extends beyond the party directly engaging the individual.

This is particularly relevant to the construction sector, because projects involve:

• main contractors;
• subcontractors;
• labour-only subcontractors;
• self-employed tradespeople; and/or
• agency labour.

For housebuilders, developers, principal contractors and subcontractors, the Act effectively extends the immigration compliance and checks a business needs to undertake.

By way of example, under the new regime, where a developer appoints a main contractor, which then appoints a subcontractor, which then brings in labour-only workers, compliance responsibility now extends beyond the direct employer relationship between the subcontractor and the workers, potentially to the main contractor and even the developer.

The new legislation will also apply to housing associations procuring schemes directly and through forward funded section 106 arrangements. It is likely also to apply to internal development arrangements between the main charitable arms of such organisations (and/or council bodies) and their development arms.

Consequences of non-compliance

Non-compliance without a statutory excuse can lead to fines of up to £45,000 per illegal worker for a first-time offence (or £60,000 for repeat breaches). There are also criminal sanctions where there is knowledge of, or reasonable cause to believe, that illegal working is taking place.

Therefore, this issue requires attention and action by all tiers of the construction supply chain. It will no longer be sufficient for businesses to argue that, because they are not the direct employer, they are free from liability for the acts of those beneath them in the contractual chain.

Whilst complete control over parties further down the contractual chain is unlikely to be achievable, particularly on large-scale construction projects involving numerous subcontractors and labour suppliers, a defence is available. This ‘statutory excuse’ can be established by adding prescribed terms into contracts and monitoring compliance with those terms by subcontractors.

When did the changes come into force?

The UK’s right to work changes came into force on 1 October 2026, pursuant to the Act and the Home Office’s code of practice on preventing illegal working.

For those involved in construction and development projects, these changes have an immediate and significant impact on all future contractual arrangements involving development and/or construction. Businesses should not delay reviewing their documentation to ensure compliance.

The Act is not retrospective; however, if a framework agreement is dated prior to 1 October 2026, it is best practice to add the prescribed terms to statements of work entered into after this date.

What to do now and going forwards

Businesses should be reviewing new and existing arrangements now to understand where responsibility sits and to ensure immediate compliance. They should, as part of this, consider what amendments will be needed to all of their relevant contracts.

Given the widespread use of sub-contracting and varied supply chain arrangements across the construction sector, it is imperative for parties at all tiers of the supply chain to:

• review their subcontracting and labour-supply arrangements;
• update supply-chain due diligence processes;
• put in place appropriate site management controls and right to work procedures and checks;
• include appropriate contractual provisions to address the new requirements;
• ensure reporting practices are in place; and
• maintain appropriate records.

The immigration team recently provided a helpful overview presentation for businesses on the effect of the new legislation. See here and here for more details.

This article was co-authored by Jessica Smith, senior associate in the projects, development and construction team.  If you would like to discuss how these changes may affect your projects or require assistance with updating your contracts to ensure compliance contact Peter Massey or Jessica Smith.