The Fair Work Agency Is Here: Are Employers Ready?

The UK’s Fair Work Agency was established on 7 April 2026 under the Employment Rights Act 2025 (ERA 2025).

Although the FWA’s wider remit is being rolled out in phases during 2026 and 2027, it is already operating in key enforcement areas. Employers should therefore understand its current role, monitor how its powers develop and take practical steps now to prepare for a more coordinated enforcement landscape.

For employers, the key will be understanding what the FWA does, what information and records it may request, and how to respond appropriately if contacted.

What is the Fair Work Agency?

The FWA is the UK’s employment rights enforcement body. It has been introduced as a new government body intended to provide a single point of enforcement for certain employment rights. The FWA brings together the roles of several existing enforcement bodies, including the Employment Agency Standards Inspectorate, HMRC’s National Minimum Wage Enforcement Team and the Gangmasters and Labour Abuse Authority. The aim is to create a more joined up enforcement landscape, rather than having different bodies responsible for different parts of workplace compliance.

The FWA operates as an executive agency of the Department for Business and Trade. It does not have a separate legal identity. Instead, the ERA 2025 confers enforcement functions on the Secretary of State, which will in practice be discharged through the FWA and its enforcement officers.

The Fair Work Agency in Practice

In practice, the FWA is expected to use a combination of guidance, intelligence-led monitoring and enforcement action. It has powers to investigate potential breaches, require relevant information and documents, inspect workplaces and issue civil penalties where appropriate. Its current remit includes National Minimum Wage compliance, regulation of employment agencies and businesses, and administration of the gangmasters licensing scheme for labour suppliers in relevant sectors. Over time, the FWA will take on enforcement of additional rights, including statutory holiday pay and statutory sick pay. Holiday pay enforcement is expected to begin in 2027, but not before April 2027.

Whilst this may sound concerning, contact from the FWA does not automatically mean that a breach has been identified. In many cases, the FWA may be carrying out routine compliance activity, responding to concerns raised by workers, or gathering information about employment practices.

Employers should ensure they are audit-ready. Depending on the issue under review, the FWA may request access to a wide range of employment-related records, including:

Employment Documentation

• Employment contracts, written statements of employment particulars, offer letters, job descriptions, employment status assessments, agency worker agreements and casual worker arrangements

Payroll and Pay Records

• Payroll records, payslips, National Minimum Wage calculations, pay calculations, overtime records, deductions from pay, wage rates and salary information

Working Time Records

• Timesheets, rotas, attendance records, clock-in and clock-out records, and training records relating to working time

Holiday and Leave Records

• Holiday entitlement calculations, holiday accrual records, holiday pay calculations, records of annual leave taken and carry-over arrangements. Although FWA enforcement of statutory holiday pay is not expected before April 2027, employers should use the lead-in period to review compliance.

Other Records

• Employment status documentation, right-to-work documentation, pension and auto-enrolment records, agency worker documentation and statutory payment records

What we can learn from similar enforcement models outside the UK

The Fair Work Ombudsman (FWO) is Australia’s national workplace relations regulator. It was established to enforce compliance with the Fair Work Act 2009, which is the main law governing Australia’s workplace relations system. This law sets the standards for minimum wages, employment conditions, and protection against unfair dismissal.

The FWO also appoints Fair Work Inspectors to investigate and enforce compliance with Australia’s workplace laws. Their work includes monitoring compliance with the National Employment Standards, provisions of the Fair Work Act relating to terms and conditions of employment, record-keeping and payslip obligations, investigating workplace complaints, and conducting targeted education campaigns in particular industries and regions.

The Australian experience shows how significantly enforcement activity can grow over time. The Fair Work Ombudsman has achieved substantial success in recovering unpaid wages and enforcing workplace laws. In the 2024–25 financial year, it recovered AUD358 million for over 249,000 workers.

The FWO provides a useful comparator for the FWA, showing how an enforcement agency can develop in practice and why, although the FWA’s powers are being phased in, its powers and enforcement ability should not be underestimated. The FWO’s work also shows that larger employers are often a focus of enforcement activity due to complex payroll issues, while also highlighting for the UK that no employer will be exempt from scrutiny.

Areas employers should review now

Employers should not treat phased implementation as a reason to delay preparation. In July 2026, the FWA secured a conviction relating to an unlicensed gangmaster, demonstrating that the agency is already active and prepared to use its existing enforcement powers. While that case concerned licensing in a high-risk labour supply context, the wider message for employers is clear: compliance needs to be demonstrable, documented and capable of being explained if challenged.

Employers should prioritise the following areas:

• Review employment contracts, written statements and worker documentation to ensure they are up to date and reflect the reality of the working arrangement.
• Check employment status decisions, particularly for casual workers, consultants, zero or low-hours arrangements and agency labour.
• Audit National Minimum Wage compliance, including working time, training time, deductions, unpaid additional hours, uniform requirements and salary sacrifice arrangements.
• Ensure working hours, overtime, attendance and rest break records are accurate, consistent and retained appropriately.
• Review holiday entitlement and holiday pay calculations, particularly for workers with irregular hours, variable pay or changing working patterns.
• Check agency worker arrangements, labour supply chains and, where relevant, gangmaster licensing requirements.
• Put in place a clear process for responding to FWA correspondence, inspections or document requests, including who will lead the response and how records will be collated.

Final Thoughts

The key takeaway is that, while the FWA is still new, employers should not underestimate the direction of travel. Australia’s experience shows how a workplace enforcement body can become more active, sophisticated and influential over time, particularly where compliance issues arise across payroll, working time, employment status and record keeping.

For employers, now is the time to review compliance, strengthen record keeping and treat employment rights enforcement as an emerging strategic risk.

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.