The Fair Work Agency has arrived: what employers need to know now

Scope of the FWA’s remit

From 7 April 2026, the FWA has assumed responsibility for:

• Enforcing the regulation of employment agencies (previously carried out by the Employment Agency Standards Inspectorate)

• Gangmaster licensing

• Compliance with the Modern Slavery Act 2015 (in conjunction with the police and the National Crime Agency)

• National Minimum Wage enforcement – subject to a transitional arrangement under which HMRC will deliver enforcement action “under a contracting arrangement”  with the FWA until April 2027, when the FWA will assume full responsibility.

Over time, the FWA’s powers will expand. Subject to further regulation, from April 2027 the FWA will have powers to enforce rights to holiday pay and statutory sick pay (SSP) and new powers to regulate umbrella companies are also expected.

FWA investigation and compliance action

The FWA has extensive investigatory and enforcement powers, including:

• Issuing underpayment notices and imposing financial penalties

• Conducting workplace inspections, including unannounced visits

• Requiring access to payroll and employment records

• Ordering payment of unpaid wages

• “Naming and shaming” non-compliant employers

• Issuing legally binding compliance notices.

Where necessary, the FWA may require individuals to provide information or documents, enter business premises and seize evidence. Notably, the FWA can pursue enforcement action without relying on worker complaints, increasing the likelihood of employer scrutiny.

New criminal offences have been created, including for the provision of false information or documents and for obstructing the exercise of an enforcement function.

Additional powers for which there is no current commencement date include:

• Power to bring proceedings before the Employment Tribunal “in place of” an individual worker who does not intend to pursue their rights personally

• Power to provide legal assistance in employment related civil proceedings and to recover costs

• Power to recover enforcement costs from non-compliant employers.

What does this mean for employers?

For employers who are already meeting their employment law obligations the introduction of the FWA should not result in significant disruption. However, the new regime places greater emphasis on demonstrating compliance.

An example of this is the new record-keeping requirements introduced into the Working Time Regulations 1998 by the Employment Rights Act 2025, which will be enforced by the FWA from April 2027. From 6 April 2026 employers are required to keep records demonstrating compliance with obligations to grant statutory annual leave and pay statutory holiday pay. The required records “may be created, maintained and kept in such manner and format as the employer reasonably thinks fit”  and must be kept for six years from the date on which they were made.

Most employers already maintain records that will satisfy this obligation. However, breach of the obligation constitutes an offence punishable by a fine, so an audit of records kept, and document retention policies is advisable.

Looking ahead to April 2027 when the FWA will have enforcement powers in relation to both holiday pay and SSP, a wider audit of contracts; payroll records and the calculation of both holiday pay and SSP (now a “day one right”) is recommended, particularly for irregular hours and part year workers where calculating and recording entitlements is less straightforward.

Accurate and accessible records will be essential, particularly given the potential for unannounced FWA inspections.

How can we help?

If you have any concerns, questions or would like to discuss anything mentioned in the article above, please do get in touch.