THE FAIR WORK AGENCY IS HERE
WHAT EMPLOYERS NEED TO KNOW NOW
A new era of employment rights enforcement began on 7 April 2026. The Fair Work Agency (FWA) is now live.
The FWA was established under the Employment Rights Act 2025 as an executive agency of the Department for Business and Trade, bringing together enforcement functions previously spread across HMRC, the Employment Agency Standards Inspectorate, and the Gangmasters and Labour Abuse Authority, creating a single enforcement body for key workers' rights.
That said, employers should understand what the FWA does (and doesn't) do right now. The Government describes 2026–27 as a "transitional year." National Minimum Wage enforcement, for example, technically falls within the FWA's remit but will continue to be delivered by HMRC under a contracting arrangement until April 2027, when the FWA takes full control.
What the FWA can do now
Even in its transitional phase, the FWA's powers are significant. It can require employers to pay amounts owed within 28 days and impose a penalty of 200% of the sum owed, capped at £20,000 per worker, reduced to 100% if paid within 14 days. The FWA does not need a worker complaint to open an investigation; it can inspect workplaces and payroll records proactively, without warning.
Holiday pay and SSP are immediate priorities. According to the FWA's own research, 900,000 workers annually have their holiday pay withheld and nearly 20% of minimum wage workers are underpaid. Employers must now keep holiday and pay records for six years; failing to do so is a criminal offence punishable by a fine.
What's coming next
Enforcement activity will be guided by principles of proportionality, consistency, transparency and targeting — with the stated aim of securing a level playing field for compliant employers. From 2027, the FWA's remit expands further, including full NMW enforcement and broader holiday pay powers.
What employers should do now
Most investigations arise from technical errors rather than deliberate wrongdoing. What matters is whether your records stand up to scrutiny. Audit your holiday pay calculations, SSP processes and record-keeping systems. Ensure payroll accuracy reflects the April 2026 rate increases. Train managers in scheduling and absence management. And if you use agency workers, check compliance with the qualifying period rules, the FWA can investigate across multiple areas in a single visit.
