The new Fair Work Agency has launched this month – this is what it means to employers
15 Apr 2026
The new Fair Work Agency has launched this month – this is what it means to employers
A major shift has taken place in the UK employment law landscape this month, and I’m concerned that many employers haven’t yet grasped the scale of the change.
The launch of the new Fair Work Agency (FWA) marks one of the most significant developments in labour market enforcement in years.
And the way things are looking, employers will have to be on top of their game to make sure they don’t fall foul of it.
That’s because the FWA is promising to be more proactive, more assertive and more interventionist than previous enforcement bodies.
For employers, understanding what the agency does, how it operates and what it expects is now essential if they are to avoid some costly mistakes.
What is the Fair Work Agency?
The FWA brings together several enforcement bodies that previously operated separately and is a product of the Employment Rights Act 2025.
Its creation is designed to simplify a system that had become fragmented and difficult for both employers and workers to navigate.
The agency now oversees the functions of the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate, the National Minimum Wage enforcement team and the Office of the Director of Labour Market Enforcement.
That means it has responsibility for enforcing minimum wage levels, investigating exploitation of vulnerable workers, unlawful deductions from pay, modern slavery and non-compliance by employment agencies.
And there’s more to come. Over time, it will also take responsibility for enforcing Statutory Sick Pay and holiday pay, giving it a broad and influential remit across the entire labour market.
What can the FWA do?
Its powers are extensive.
The FWA can investigate suspected breaches, request undertakings, issue compliance notices and seek court orders. It can impose financial penalties and, crucially, it can support workers directly, including bringing tribunal claims on their behalf.
This last point alone should be enough make employers sit up. A regulator that can act as both investigator and litigant is a regulator with real teeth.
It can issue financial penalties in cases where it finds an employee has been underpaid, demand evidence that a business is compliant with employment laws and recover enforcement costs if you are found to be at fault.
The agency is committed to taking a proactive approach. Rather than waiting for complaints, it will use data, intelligence and targeted inspections to identify non‑compliance.
Sectors with complex supply chains, high use of agency labour or a history of labour exploitation are likely to see early attention. But no employer should assume they are out of scope. The FWA’s mandate is broad and its interest will extend across all industries.
One of the most immediate changes is the new record keeping duty. Employers must now keep six years of evidence showing compliance with statutory holiday entitlement. Failure to do so is a criminal offence. This is a major shift. Holiday pay has long been a contentious area, and the FWA will be looking closely at whether employers have calculated and paid it correctly.
What should employers be doing now?
First, review pay and working time records. Make sure National Minimum Wage compliance is watertight, including for salaried staff, shift workers and anyone with irregular hours. Check that holiday pay reflects the correct reference period and includes all elements of normal remuneration.
Second, audit agency worker arrangements and labour supply chains. Ensure contracts are clear, responsibilities are understood and due diligence is documented. The FWA will expect employers to know who is working for them and on what terms.
Third, update policies, processes and training. HR teams, line managers and payroll staff need to understand the new regime and the organisation’s obligations within it.
Finally, prepare for a more assertive enforcement landscape. The FWA is not a passive regulator. Employers who act early, tighten their compliance frameworks and maintain accurate records will be in a far stronger position as the new system beds in.
It’s a lot to take in and I’m not sure too many businesses have picked up on what it all means yet.
But if you want to get ahead of the game, get in touch for a free consultation and for an idea about how Wright HR can help you stay the Wright side of the law.
