From 7 April 2026, a new national enforcement body will have the power to investigate your business, issue enforcement notices, pursue civil proceedings against you, and publicly name you as a non-compliant employer. That body is the Fair Work Agency.
This article explains what the Fair Work Agency is, what it can do, which employers face the greatest risk, and what practical steps you should take before it opens its doors.
What Is the Fair Work Agency?
The Fair Work Agency (FWA) is a new single national enforcement body established under the Employment Rights Act 2025. It consolidates three previously separate enforcement functions into one coordinated operation:
- HMRC’s National Minimum Wage enforcement team has investigated and prosecuted employers for NMW underpayment for decades.
- The Employment Agency Standards Inspectorate oversees compliance by employment businesses and agencies.
- The Gangmasters and Labour Abuse Authority tackles exploitation and labour abuse in high-risk sectors.
Previously, these three bodies operated with separate powers, separate processes, and separate enforcement priorities. The Fair Work Agency brings them together into a single, well-resourced, and coordinated force.
What Can the Fair Work Agency Do to Your Business?
The FWA’s enforcement remit covers National Minimum Wage compliance, holiday pay entitlements, Statutory Sick Pay, and agency worker rights. From day one, it has the power to:
- Investigate on its own initiative or on a worker complaint. Critically, the barrier to making a complaint is being actively lowered. Workers will have a single point of contact, a single helpline, and a clearer route for raising concerns. The volume of complaints is likely to increase.
- Issue enforcement notices requiring employers to pay arrears and come into compliance within a defined timeframe.
- Pursue civil proceedings against employers who fail to comply with enforcement notices.
- Name and shame employers publicly, a reputational consequence that is entirely separate from any financial penalty.
Why This Matters More Than You Might Think
The NMW enforcement regime has been toughened progressively over the past decade. Penalties can reach 200% of the arrears owed, up to a maximum of £20,000 per worker. High-profile naming-and-shaming lists have included household names and small local employers alike.
The Fair Work Agency takes that enforcement apparatus and amplifies it, combining NMW powers with holiday pay and SSP enforcement in a single joined-up operation.
Holiday pay has been an area of persistent non-compliance for years, particularly around whether regular overtime, commission payments, and allowances should be included in the calculation for the first four weeks of statutory annual leave. Many employers are still calculating this incorrectly. The FWA will be looking for exactly this type of systematic underpayment.
The SSP changes arriving on 6 April 2026 add a further layer. As SSP becomes payable to a much wider pool of employees from day one of sickness, the FWA will have oversight of whether employers are administering it correctly.
Which Employers Are Most at Risk?
Any employer that uses agency workers should review their arrangements immediately. The FWA has specific oversight of employment agency compliance, and the Employment Rights Act 2025 is expanding the definition of employment businesses to include umbrella companies, bringing a significant new category of working arrangements within scope.
Employers in sectors with high proportions of lower-paid, part-time, or irregular-hours workers, including care, hospitality, retail, cleaning, construction, and warehousing, should treat the FWA’s launch as a direct prompt for a thorough compliance review. These are the sectors where NMW underpayment, holiday pay errors, and SSP non-compliance have historically been most prevalent.
However, no employer should assume they are immune. NMW calculation errors are surprisingly common even among businesses acting in good faith. Salaried workers who regularly work unpaid overtime, workers subject to deductions that bring their effective rate below the minimum wage, or employees required to purchase uniforms at their own cost are all scenarios the FWA will investigate.
What Should You Do Before 7 April 2026?
Conduct an NMW audit. Check that every worker, including salaried staff who regularly work beyond their contracted hours, is receiving at least the current National Minimum Wage for all hours worked. Review whether deductions, uniform costs, or travel requirements bring anyone below the threshold.
Review your holiday pay calculations. Are you including regular overtime and commission in the calculation for the first four weeks of statutory annual leave? If not, you may be systematically underpaying, which is precisely the type of ongoing non-compliance the FWA will prioritise.
Get your SSP administration in order. From 7 April 2026, SSP applies to every employee from day one of sickness absence. Ensure your absence recording systems, payroll processes, and absence management procedures are set up to handle the expanded entitlement correctly.
Review agency and umbrella arrangements. If you engage workers through employment agencies or umbrella companies, review those arrangements with your legal or HR adviser before the FWA launches.
The Bigger Context
The Fair Work Agency is one component of a much larger legislative shift. April 2026 is a significant moment for UK employment law, with multiple changes landing simultaneously alongside the FWA’s launch, including the SSP reforms and expanded family leave rights.
The changes do not stop in 2026. From January 2027, the unfair dismissal qualifying period drops to six months and the compensatory award cap is removed. The direction of travel is unmistakable: worker rights are expanding, enforcement is strengthening, and the financial and reputational cost of non-compliance is rising significantly.
How Employment Law Solutions Can Help
Employment Law Solutions provides retained HR and employment law support to SMEs across the UK. We can help you carry out a pay and compliance audit before April, review your holiday pay calculations, update your SSP and absence management procedures, and make sure your business is well-positioned before the Fair Work Agency begins its enforcement work.
The best time to address a compliance issue is before an enforcement body comes knocking. April 2026 is not far away. Contact Employment Law Solutions today for a free consultation. Visit employmentlawsolutions.co.uk or call us to speak to an adviser before the deadline arrives.
This article reflects the law as at March 2026. It is for general information purposes and does not constitute legal advice.
