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Fair Work Agency: what the new enforcement body means for employers

The Fair Work Agency (FWA) launches on 7 April 2026 as a single unified enforcement body for employment rights. It consolidates functions previously split across HMRC, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate. Employers should understand what the FWA enforces, its new powers, and how to prepare for a more co-ordinated enforcement landscape.

Change event: Fair Work Agency launches as unified employment enforcement body Effective 7 April 2026

What is changing

The Fair Work Agency (FWA) launches on 7 April 2026 as a new unified enforcement body created under the Employment Rights Act 2025. It is chaired by Matthew Taylor CBE, author of the 2017 Good Work review.

Until now, enforcement of core employment rights has been fragmented across multiple bodies:

  • HMRC — National Minimum Wage and National Living Wage enforcement
  • Gangmasters and Labour Abuse Authority (GLAA) — labour exploitation and gangmaster licensing
  • Employment Agency Standards Inspectorate — regulation of employment agencies and employment businesses

The FWA brings these functions together into a single body with broader visibility across employers and co-ordinated enforcement priorities. For most employers, the practical effect is a more joined-up, proactive enforcement regime with new powers that did not previously exist.

Launch date
7 April 2026
Chair
Matthew Taylor CBE
Replaces
HMRC NMW enforcement, GLAA, Employment Agency Standards Inspectorate
Created by
Employment Rights Act 2025
Key new power
Can bring employment tribunal claims on behalf of workers

What the FWA enforces

The FWA has responsibility for enforcing:

  • National Minimum Wage and National Living Wage — including underpayments, arrears, record-keeping failures, and penalty notices
  • Statutory sick pay — employer compliance with SSP obligations
  • Holiday pay — correct calculation and payment of statutory holiday entitlement
  • Employment agency regulations — conduct of employment agencies and employment businesses, including agency worker rights
  • Modern slavery and labour exploitation — gangmaster licensing, forced labour, and worker exploitation (transferred from the GLAA)

This means a single body now has oversight of pay, leave, agency work, and exploitation — areas that were previously investigated by separate organisations with limited ability to share intelligence.

New enforcement powers

The FWA has significant enforcement powers, including some that are entirely new:

  • Workplace inspections — the FWA can inspect any workplace and require employers to produce evidence of compliance with employment rights
  • Notices of Underpayment — the FWA can issue formal notices requiring employers to pay arrears for National Minimum Wage and holiday pay breaches
  • Financial penalties — penalties for NMW non-compliance continue, calculated as a percentage of arrears owed (currently up to 200% of unpaid wages, capped at £20,000 per worker)
  • Tribunal claims on behalf of workers — the FWA can bring employment tribunal claims on behalf of individual workers, even if the worker chooses not to bring a claim themselves. This is a significant new power with no equivalent under the previous enforcement regime
  • Naming and shaming — employers found to have breached NMW rules can be publicly named

What this means for different employers

The practical impact depends on your circumstances:

  • All employers — ensure NMW, SSP, and holiday pay compliance is up to date. The FWA will have a more complete picture of each employer across pay, leave, and agency use than any single body had before
  • Employers using agency workers — the FWA now oversees both agency regulation and worker pay rights. Non-compliant hirers may face co-ordinated enforcement across both areas
  • Sectors with high NMW exposure — retail, hospitality, care, agriculture, and cleaning sectors should expect continued proactive enforcement, now under a single co-ordinated body
  • Employers in supply chains — the FWA inherits the GLAA's focus on labour exploitation and modern slavery. Businesses with complex supply chains should review due diligence arrangements

⚠️ Penalties and enforcement

The FWA retains all existing penalty powers and gains new ones:

  • NMW underpayment — penalties of up to 200% of arrears owed, capped at £20,000 per worker. The employer must also repay all arrears in full
  • Public naming — employers who underpay the minimum wage can be publicly named by the government
  • Criminal prosecution — deliberate NMW non-compliance can lead to criminal prosecution, unlimited fines, and up to 2 years' imprisonment
  • Tribunal claims by the FWA — the FWA can bring claims even where individual workers do not, meaning non-compliance is harder to avoid through worker reluctance to pursue claims

❗ What you need to do

  • Audit NMW compliance — check that all workers (including apprentices, interns, and piece-rate workers) are paid at least the correct NMW rate for their age. Remember that salary sacrifice, uniform deductions, and unpaid working time can take pay below NMW
  • Review pay records — the FWA can require employers to produce evidence of compliance. Ensure you keep accurate, accessible records of hours worked and pay for all workers
  • Check SSP and holiday pay — verify that statutory sick pay is paid correctly and that holiday pay calculations comply with current rules, including for irregular-hours and part-year workers
  • Review agency arrangements — if you use agency workers, check that the agency is compliant with employment agency regulations and that agency workers receive their correct entitlements
  • Review supply chain due diligence — if you have a turnover above £36 million, check your modern slavery statement is up to date. All employers should have appropriate due diligence for labour exploitation risk in their supply chains
  • Update compliance contacts — note that enforcement correspondence will come from the Fair Work Agency rather than HMRC, the GLAA, or the Employment Agency Standards Inspectorate from April 2026

ℹ️ Northern Ireland

Employment law is devolved in Northern Ireland. The Fair Work Agency's remit covers England, Scotland, and Wales. Minimum wage enforcement in Northern Ireland is handled by HMRC, and labour exploitation by separate Northern Ireland bodies. Check with the Labour Relations Agency for Northern Ireland provisions.

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