The Home Office scheme, set out in Section 4 of the Immigration and Asylum (Provision of Accommodation to Failed Asylum Seekers) Regulations 2005, requires failed asylum seekers to "do community work" in return for food and accommodation.
Richard Solly, campaigns and information officer for the Churches' Commission for Racial Justice, said: "Failed asylum seekers who reach 18 and above are dragged back to detention centres and forced to work for food and accommodation."
YMCA England confirmed it was in negotiations with the Home Office. In a statement, it acknowledged the concerns, but said there would be safeguards.
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