The Fair Work Agency: who they are, what they enforce, and what to do about it
On 7 April 2026, the UK launched the Fair Work Agency (FWA), the country's first single enforcement body for workplace rights. It replaces the previous fragmented enforcement landscape with one regulator, with broader powers, more inspectors, and a budget that's been increased by over 25% to £60.1 million.
For most employers this is the most significant change in workplace enforcement for over a decade. Other articles on this blog reference the Fair Work Agency in passing. This article covers what it is, what it actually enforces today, and what's coming. We are not lawyers; this is not legal advice.
What the Fair Work Agency replaces
Before April 2026, employment rights were enforced by several different bodies, each with its own remit. HMRC enforced National Minimum Wage and Statutory Sick Pay. The Employment Agency Standards Inspectorate (EAS) regulated employment agencies and businesses. The Gangmasters and Labour Abuse Authority (GLAA) tackled serious labour exploitation and modern slavery offences in England and Wales. The Director of Labour Market Enforcement provided oversight.
In practice this meant an employer underpaying holiday pay AND misclassifying agency workers might face two separate investigations by two separate bodies, with different rules and different timelines. Workers struggling with multiple compliance issues had to navigate the same fragmented landscape.
The FWA consolidates these functions into one agency. From its launch, it is responsible for employment agency and employment business regulation, gangmasters licensing and labour abuse enforcement, labour market enforcement undertakings and orders, notices of underpayment for National Minimum Wage and Statutory Sick Pay and holiday pay, and recovery of its own enforcement costs from non-compliant employers.
What's still being phased in
This is the part that needs careful reading. The FWA launched on 7 April 2026, but the government has been clear that 2026 to 2027 is a "transitional year." Not all of the agency's powers are operational yet.
National Minimum Wage enforcement will continue to be carried out by HMRC under a contracting arrangement with the FWA. Full transfer to the FWA is anticipated in April 2027.
Holiday pay enforcement is included in the FWA's remit but additional regulations are needed before it begins active enforcement. Government statements indicate this is expected to commence during 2027.
Statutory Sick Pay enforcement powers are operational, but the FWA's expanded enforcement infrastructure is still being built out.
Powers not yet in force include the ability to bring proceedings in the employment tribunal on a worker's behalf, and the provision of legal advice or assistance to workers.
The clearest summary is in the Strategic Steer document published by the government on the day of the FWA's launch. That paper describes 2026 to 2027 as a period when the FWA focuses on consolidating existing enforcement functions, building data and intelligence capability, and preparing for expanded enforcement from 2027 onwards.
What the FWA can do today
Five practical powers that are operational from April 2026.
The agency can enter premises (with appropriate warrants) and require the production of documents and evidence. This is broader than any of its predecessor bodies.
It can issue Notices of Underpayment for SSP and (in due course) holiday pay, requiring employers to pay the underpaid amount within 28 days, plus a mandatory penalty of 200% of the underpayment, capped at £20,000 per worker. The penalty can be reduced to 100% if paid within 14 days.
It can recover its own enforcement costs from non-compliant employers. This is a significant change. Previously, enforcement was funded entirely by the taxpayer, which limited its scope. Cost recovery from employers found to be non-compliant means the agency can investigate more widely without straining its core budget.
It can issue labour market enforcement (LME) undertakings and apply for LME orders from the court. These are formal compliance mechanisms that require employers to take specific corrective actions.
It can pursue criminal investigations into modern slavery offences within its remit, working with police and the National Crime Agency.
What this means in practice
Three structural shifts that matter.
First, enforcement is moving from reactive to proactive. The FWA's 550 inspectors are expected to conduct inspections without prior complaints. Previously, most enforcement waited for a worker to complain; now, random or risk-based inspections are part of the model. Employers can't assume that no complaint means no inspection.
Second, the consolidation means a single investigation can cross multiple compliance areas. An inspector visiting your business to look at SSP records can also examine agency worker arrangements, working time records, and modern slavery risk in your supply chain. Previously these would have been separate investigations by separate bodies.
Third, the budget signals serious intent. The £60.1 million budget is over 25% larger than the combined budget of the bodies it replaces. The 550 inspectors are a notable expansion of capacity.
That said, the transitional year also matters. Employers should not expect aggressive immediate enforcement across the FWA's full remit. The agency itself has signalled that 2026 to 2027 is about consolidation and capability building, with the most significant expansion of enforcement coming from 2027 onwards. This is a window for getting compliance in order, not a year of immediate audits.
What you need in place
Five practical things to have working before any inspection.
Records that prove compliance. The FWA will assess your processes based on what you can evidence, not what you intended. This applies particularly to the holiday pay 6-year record-keeping rule, which is now a criminal offence to breach.
Updated SSP processes that reflect the April 2026 changes including day-one entitlement, removal of the Lower Earnings Limit, and the new calculation rules.
For users of agency workers: a clear understanding of the 12-week qualifying period and the obligation to equalise pay and conditions. Agency worker regulations are firmly within the FWA's remit and the agency has formally taken over EAS functions.
Clear ownership of compliance inside the business. One recurring SME problem is that responsibility for compliance is assumed but not assigned. Payroll thinks HR owns it; HR thinks finance does. Define who owns FWA-relevant compliance and document it.
Awareness of how to engage with the agency. The FWA has published a contact and guidance route at gov.uk/government/organisations/fair-work-agency. Better to engage proactively if you have a question than reactively after an investigation begins.
Where to look for the detail
The Fair Work Agency's official information is at gov.uk/government/organisations/fair-work-agency. The government's overview of its remit is at business.gov.uk/campaign/employment-changes/employers/fair-work-agency. The Strategic Steer document published on 7 April 2026 sets out the agency's priorities for the transitional year.
If your business has variable-hours workers, agency workers, multiple sites, or complex pay arrangements, the FWA represents a meaningful change in your enforcement risk environment. Most employers do not face problems because they intended to do something wrong. They face problems because nobody tightened the details early enough.
How PRODICTA fits in
PRODICTA's compliance features are designed to produce the kind of documentation the Fair Work Agency expects. SSP rules from April 2026 are applied automatically with the new calculation. Holiday pay records are kept for the six years required, including entitlement, leave taken, and pay calculations covering variable elements. The compliance pack exports records in a structured format if requested by the agency.
The Bias-Free Hiring Certificate adds an audit trail for selection decisions, addressing the fairness checks that intersect with the Equality Act and the FWA's labour market enforcement remit. To see how it works, the demo at prodicta.co.uk/demo includes the compliance dashboard.