Employment law has been moving quickly over the past couple of years – and now, there’s a major new development that employers need to have firmly on their radar.
As of 7 April 2026, the Fair Work Agency (FWA) is officially in place. And while it might sound like just another government body, this one represents a real shift in how employment rights are enforced across the UK.
So, what does this actually mean for your business – and how should you be preparing?
Here’s our thoughts…
What is the Fair Work Agency?
The Fair Work Agency is a new, single enforcement body introduced under the Employment Rights Act 2025.
Its purpose is simple: to bring together the enforcement of key employment rights into one central organisation.
Previously, enforcement was split across multiple bodies, including:
- HMRC (for National Minimum Wage enforcement)
- The Gangmasters and Labour Abuse Authority (GLAA)
- The Employment Agency Standards Inspectorate (EAS)
Now, all of these sit under one roof.
The result? A more joined-up, proactive approach to compliance – and fewer gaps for issues to slip through.
Why the Fair Work Agency Matters
At its core, the Fair Work Agency is about raising standards and creating a level playing field.
For businesses that are already doing things properly, this is a positive step. It helps ensure you’re not being undercut by organisations cutting corners.
But it also means there’s nowhere to hide for businesses that aren’t compliant.
The FWA isn’t just reactive – it’s designed to actively monitor, investigate and enforce.
What Does the Fair Work Agency Cover?
From day one, the agency brings together enforcement of several key areas, including:
- National Minimum Wage and National Living Wage
- Protections for agency workers
- Right to work compliance
- Gangmaster licensing and labour exploitation
Over time, its remit will expand further to include:
- Statutory Sick Pay (SSP)
- Holiday pay enforcement
- Wider employment rights
This expansion is particularly important – especially around holiday pay, which historically has been difficult to enforce unless employees raised claims themselves.
Key Powers Employers Need to Be Aware Of
The Fair Work Agency has been given significant authority to enforce compliance.
Here’s what that looks like in practice:
Workplace inspections
The FWA can carry out inspections and investigations – even without a formal complaint.
Access to documentation
Employers may be required to provide:
- Contracts and policies
- Payslips and payroll records
- Working time records
- Internal communications
This will also extend to right to work documentation. Employers should be prepared to provide clear, accurate records showing that appropriate checks have been carried out and retained in line with legal requirements.
Financial penalties
If underpayments are identified, businesses may face:
- Repayment of arrears (up to 6 years backdated)
- Additional penalties (up to 200% of the underpayment)
Tribunal action on behalf of employees
The FWA can:
- Bring claims to employment tribunals
- Support or represent employees
- Act where individuals are unwilling or unable to raise claims themselves
Naming and enforcement action
In serious cases, businesses may:
- Be publicly named
- Face enforcement orders
- Be required to change practices by law
New Record-Keeping Requirements
One area that’s likely to catch businesses out is record keeping.
Employers are now required to:
- Keep accurate holiday and holiday pay records
- Retain these records for six years
Failing to do so isn’t just poor practice – it could become a criminal offence, resulting in fines.
Right to Work Compliance
Right to work checks are expected to come under increased scrutiny. Employers should ensure they have consistent process in place for checking, documenting and retaining evidence of an employee’s right to work in the UK. Gaps in this area can quickly become a compliance risk.
What This Means for SMEs
For small and medium-sized businesses, this change is particularly significant.
Not because you’re doing anything wrong – but because:
- HR is often shared across roles
- Processes can evolve organically
- Systems aren’t always centralised
In reality, most compliance issues come from everyday oversights, such as:
- Inconsistent holiday calculations
- Outdated contracts
- Missing or incomplete records
The Fair Work Agency is specifically designed to identify these types of gaps.
Practical Steps Employers Should Take Now
The good news? There’s still time to get ahead of this.
Here’s where we recommend focusing:
Review your core HR documentation
Make sure contracts, policies and handbooks are up to date and compliant.
Audit your pay practices
Check:
- Minimum wage compliance (including deductions and unpaid time)
- Holiday pay calculations
- Sick pay processes
Strengthen your record keeping
Ensure you have:
- Clear, accessible employee records
- Consistent processes across your business
Train your managers
Your managers are often the first line of defence. Make sure they understand:
- Employment rights basics
- How to handle issues correctly
- When to escalate concerns
Get proactive, not reactive
The FWA is designed to act early – so your approach should be the same.
A Shift Towards Proactive Enforcement
One of the biggest changes the Fair Work Agency brings is its proactive approach.
This isn’t just about responding to complaints anymore.
The agency will:
- Monitor high-risk industries
- Identify patterns of non-compliance
- Step in before issues escalate
For employers, that means compliance needs to be built into everyday operations, not just addressed when something goes wrong.
How CE People Can Support You
At CE People, this is exactly the kind of change we help businesses navigate every day.
We understand that for many SMEs, HR isn’t always straightforward – and keeping up with evolving legislation can feel overwhelming.
That’s where we come in.
We can support you with:
- Reviewing and updating your HR documentation
- Auditing your payroll and compliance processes
- Implementing systems (like Breathe HR) to keep everything organised
- Providing ongoing advice and support as legislation evolves
Most importantly, we take a people-first, practical approach – helping you stay compliant without losing sight of your culture and your team.
Learn more about Breathe HR and how this could support you here.
Final Thoughts
The introduction of the Fair Work Agency marks a significant shift in how employment rights are enforced in the UK.
For some businesses, it will bring challenges.
For others, it’s an opportunity to strengthen processes and build confidence.
Either way, one thing is clear:
Now is the time to get your house in order.
If you’d like support reviewing your current setup or preparing for these changes, get in touch with the team at CE People – we’re always happy to help.
