On 7 April 2026, in accordance with the Employment Rights Act 2025 and other commencement regulations, a new Fair Work Agency was established.
This new regulatory body will fundamentally change the enforcement of individual employment rights in the UK by bringing the powers of various enforcement bodies under a single banner.
So, what does that mean for employers?
The Fair Work Agency (FWA) is a new, independent body. Its primary aim is to enforce employment rights more effectively, simplifying the current system by consolidating various enforcement agencies into a single entity. The establishment of the FWA marks a significant shift in the UK’s approach to protecting workers’ rights.
The remit of the Fair Work Agency
It will take on enforcement duties for specific employment rights, including the National Minimum Wage (NMW) and ensuring workers are paid in accordance with statutory rules. Eventually, it will also take on the enforcement of Statutory Sick Pay (SSP) and holiday pay; however, enforcement of these rights will be integrated into the FWA’s responsibilities over time.
The FWA will also take on responsibility for investigating and addressing issues related to modern slavery offences in the workplace. Further, overseeing the treatment of agency workers to ensure compliance with the law will also fall within the remit of the FWA, as will managing the regulation of gangmasters to prevent exploitation in industries such as agriculture, food processing and horticulture.
In addition to these, the FWA will also enforce a new record-keeping obligation for employers. Businesses will be required to maintain records demonstrating compliance with statutory holiday entitlement for six years. Failure to keep accurate records will constitute a criminal offence punishable by a fine.
How the Fair Work Agency will operate
The FWA is designed to be a proactive enforcement body with extensive powers and resources to uphold employment laws. Below is an outline of how the agency will function.
1. Powers and enforcement mechanisms
From the outset, the FWA has investigatory powers, including access to documents, information and individuals, that are necessary to carry out its enforcement powers. It is also responsible for enforcing “relevant labour market legislation.” If the Secretary of State believes a person has committed a labour market offence, the FWA can request an undertaking to comply with specific requirements. If the undertaking is refused, a court can issue a Labour Market Enforcement (LME) order. Failure to comply with such an order will be a criminal offence.
The FWA, working with the HMRC enforcement team initially, will also take over enforcement of NMW payments, issuing notices of underpayment to employers, specifying the amount owed and deadlines for payment. It also includes enforcement of the duty on employers to keep records in relation to NMW and for the payment of sums ordered by an employment tribunal and settlements under a COT3.
Eventually, the FWA will have a broad range of powers to ensure compliance and protect workers’ rights, including providing legal support, assistance and representation to workers involved in employment disputes. It will also be able to bring claims to an employment tribunal on a worker’s behalf if the worker is unwilling or unable to do so.
2. Proactive role in non-compliance
The FWA will not only respond to complaints but will also take a proactive approach to identifying non-compliance. This includes monitoring businesses and industries with a higher risk of exploitation or rights violations.
3. Collaboration with other bodies
Although the FWA will absorb several existing agencies, it will continue to work in collaboration with other entities, such as the employment tribunal service, which remains unaffected by the agency’s establishment. Employees will still be able to bring claims directly to a tribunal if they choose.
4. Penalties and enforcement
The FWA will have the authority to impose financial penalties on employers who fail to comply with statutory obligations, such as paying statutory entitlements or failing to adhere to tribunal orders.
Takeaway
The FWA is set to become a significant body in UK employment law enforcement that many employers will need to deal with at one point or another. In supporting individuals with a route to the employment tribunal, it is also likely to increase the number of claims that employers face from unhappy employees.
If you have any questions relating to the Fair Work Agencies rules please get in touch
