What employers need to know about the introduction of the Fair Work Agency
Amongst a host of other changes coming into effect in early April 2026, the Government will introduce a new single labour market enforcement body called the Fair Work Agency (FWA). Helen Russell, lead HR consultant and solicitor in our employment team, outlines what this means for employers.
The FWA is intended to provide a streamlined, central point of support and enforcement for both workers and employers, and the inception of this body marks a significant change in how employment rights will be regulated, enforced, and monitored across the UK.
What is the Fair Work Agency?
The FWA will consolidate the functions of existing enforcement bodies into one:
- Employment Agency Standards Inspectorate
- Gangmasters and Labour Abuse Authority
- HMRC’s National Living and Minimum Wage enforcement team
- Office of the Director of Labour Market Enforcement
By merging these bodies, the intention is to create a more efficient enforcement system with clearer oversight and easier access for workers seeking help.
What the FWA will cover
The new agency will assume responsibility for overseeing and enforcing a broader range of employment rights, including:
- National Minimum Wage and National Living Wage
- Statutory Sick Pay (SSP) compliance
- Holiday pay (and records) enforcement (for the first time under a state body)
- Employment agency regulations
- Employment tribunal penalty scheme
- Labour exploitation and modern slavery protections
This widened remit demonstrates a move towards stronger and more coordinated enforcement of day‑to‑day statutory employment rights.
New powers for the FWA
The legislation proposes strengthened powers aimed at both supporting compliant employees and improving enforcement against non‑compliance.
These include:
- Extended enforcement powers
The FWA will be able to investigate and enforce underpayments relating to:
- Statutory Sick Pay (SSP)
- Holiday pay
- Other labour market costs and statutory entitlements
- Support for employers
Notably, the agency will have an explicit role in supporting employers who are trying to comply, offering guidance and assistance where needed.
- Bringing tribunal claims on behalf of workers
Where a worker chooses not to pursue a claim themselves, the FWA may:
- Bring tribunal proceedings on their behalf
- Seek legal remedies for statutory breach
- Providing legal assistance
The FWA may offer legal assistance to workers, with costs recoverable from employers found to be in breach.
- Recovering historic underpayments
The FWA will be empowered to:
- Recover up to six years of underpaid statutory entitlements
- Impose additional financial penalties, payable to the government
This represents a substantial potential liability for employers who have longstanding compliance issues.
What should employers do now?
Many employers will already have work underway in advance of some Employment Rights Act measures taking effect, and with the 7 April 2026 FWA launch date approaching, employers should begin reviewing their compliance processes, in particular:
- Accuracy of holiday pay calculations
- Management of holiday records
- Correct SSP administration (mindful of the new entitlement on day 1 of absence)
- National Minimum Wage and NLW practices
- Agency worker arrangements
- Record‑keeping and onboarding processes
The FWA’s broader powers and ability to retrospectively pursue underpayments increase the financial and reputational risks of non‑compliance.
Our employment and HR team will be very happy to speak to you if you would like to understand these issues, and any others in relation to the ERA, and can be reached on [email protected] or by calling 01772 258321.