United Kingdom: illegal working extends to subcontractors

Before 1 October 2026, only the direct employer risked a penalty for illegal working in the UK. Section 48 of the Border Security, Asylum and Immigration Act 2025, brought into force by Home Office Regulations SI 2026/683, extends the regime to three new categories: worker’s contracts (an intermediate status between employee and self-employed), workers engaged through an online platform, and subcontracting chains.

This last point is the most significant for a European group with a UK subsidiary: your subsidiary can now be penalised for the illegal working of a person with whom it has no direct contractual link.

Illegal working in the UK: who is in scope since 1 October?

✅ Worker’s contracts now in scope : UK employment law distinguishes three categories: employee, worker (an intermediate status between employee and self-employed) and self-employed. The right-to-work check now extends to the second category. An agency worker is the most common example cited in the Home Office’s official guide.

✅ Individual subcontractors and digital platforms are now in scope : people matched through a dedicated app or website (such as Upwork, Deliveroo or TaskRabbit) are now covered. A genuinely self-employed person who contracts directly with their own clients remains outside it. Which is why verifying the true nature of the contract matters before any engagement starts.

✅ Liability now runs up the entire chain : a company can be penalised without any direct contractual link to the person working illegally. A practical example: if your UK subsidiary engages a contractor who subcontracts in turn, and the end worker has no right to work in the UK, your subsidiary can be held liable.

The civil penalty is £45,000 per worker for a first breach and £60,000 for a repeat breach within three years. The scope changes, not the amounts. Knowingly employing someone without the right status remains a criminal offence.

One point of confusion to avoid: the Home Office announced in April 2026 an extended right-to-work check obligation for sponsors. That extension was set aside on 20 May 2026 and no longer applies. Our update on the [UK Sponsor Licence] covers that reversal. Section 48 is in force.

Posted workers, contractors and short assignments: what to check before start

For a European group with a UK subsidiary, the starting point is your mobility flows. Global Business Mobility visas and posting to the UK already govern your transfers. Individual contractors and short assignments, however, call for a separate check.

• Map everyone who works for your UK subsidiary: employees, workers, individual subcontractors, posted workers and business visitors. For each person, record the intended immigration route and the actual activity before day one.
• Check each new person engaged under a worker contract, individual subcontracting arrangement or via a platform before they start. Keep a dated copy of the check for the duration of the assignment and two years after.
• Review your subcontracting contracts and substitution clauses: specify who checks what between the subsidiary, the parent company and the contractor, and ensure that evidence is passed up the chain.