The Fair Work Agency is a new enforcement body created under the Employment Rights Act 2025, launched on 7 April 2026 to bring together several existing enforcement functions under one roof. Below we explain the background to its creation, what changed, and what it means for employers and workers.
Position up until 7 April 2026
When a worker wished to enforce their working rights, the most common course of action was to present a complaint to the Employment Tribunal. Less commonly, the State also has powers to enforce certain rights through agencies such as HMRC’s National Minimum Wage Enforcement Team and the Gangmasters and Labour Abuse Authority.
With a number of different enforcement agencies in place, there can be some difficulties for those seeking to understand where they ought to go to receive assistance. The effect is that these avenues are not as regularly pursued.
The Fair Work Agency’s establishment
In April 2026: The Fair Work Agency was officially launched on 7 April 2026 under the Employment Rights Act 2025 and gained certain enforcement powers. This body represents a merger of existing statutory enforcement functions previously carried out by a variety of other bodies and agencies, streamlining the enforcement of domestic agency rules, the National Minimum Wage, licensing of gangmasters, and action against serious labour exploitation.
In addition, it is intended that the Fair Work Agency takes on additional functions in 2027 such as enforcing holiday pay and statutory sick pay, with opportunity for the Government to extend powers to cover other employment rights.
The Fair Work Agency’s powers
The Fair Work Agency’s powers are to include:
- inspecting workplaces and requiring employers to evidence compliance with employment law;
- issuing Notices of Underpayment requiring payment and a penalty;
- bringing Employment Tribunal proceedings on behalf of a worker;
- enforcing compliance with the law where labour market criminal offences have occurred; and
- recovering enforcement costs from businesses.
What does the Fair Work Agency mean for employers?
Rather than risking confusion amongst workers and employers as regards important employment issues, the introduction of the Fair Work Agency provides a single point of contact.
The Government has set out that the Fair Work Agency will be there to support employers who wish to comply with the law, in the hope of resolving issues which may arise later.
However, the enforcement powers have the potential to give rise to significant cost to employers who do not comply. This may be of particular concern in areas like holiday pay which can be complex. Some employers may need to adapt their current approach to such issues and begin taking a more proactive approach to ensure they are compliant with the law. If not, they may find themselves having to make penalty payments to the Fair Work Agency, as well as paying any sums owed to workers.
If you would like to discuss anything related to the Fair Work Agency, or indeed anything to do with the Employment Rights Act, please contact a member of the Employment team.
To find out what other aspects of employment law are affected by the Employment Rights Act, read our blog “The Employment Rights Act – When to expect change”.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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