Picture 3 enforcement bodies quietly merging into one, with a wider remit and a longer memory. That's more or less what happened on 7 April 2026, when the Fair Work Agency (FWA) launched under the Employment Rights Act 2025, bringing together enforcement work that used to sit separately with HMRC, the Employment Agency Standards Inspectorate, and the Gangmasters and Labour Abuse Authority.

One agency, wider reach, but worth remembering: no new laws here. The FWA is simply enforcing rules that were already in place, just with wider reach and more people watching.

What falls under their remit?

The Act covers what it calls “relevant labour market legislation”: National Minimum Wage (NMW), Statutory Sick Pay (SSP), holiday pay, the right to a written statement of employment particulars, and protections for agency workers. Holiday pay and SSP enforcement joins the list in 2027, and the Secretary of State can add more over time by regulation, so this remit is only likely to grow.

2026/27 is being treated as a transitional year. NMW enforcement, the biggest piece, moves fully across from HMRC during this period. Meanwhile, the FWA says it's focusing on making compliance easier: exploring digital tools, working with ACAS on clearer guidance, joining up with other agencies, and preparing for holiday pay and SSP enforcement from 2027.

One thing worth flagging: they don't need a complaint to open an investigation. They can come looking on their own initiative.

Their toolkit is broad.

A quick rundown of what they can do, and there's quite a lot on the list:

- Issue ‘information notices’ requiring specific records and details of your employment practices.

- Send FWA enforcement officers to carry out inspections, including entering premises, seizing records, checking equipment and interviewing staff.

- Issue ‘enforcement notices’ requiring underpayments to be corrected within 28 days, recovering arrears and imposing penalties of up to 200% of the underpayment, capped at £20k per employee (HMRC can already do this). Fyi, the maximum period HMRC can go back and demand arrears is 6 years.

- Publicly name and shame, now extended beyond NMW to cover SSP and holiday pay too.

- Issue ‘labour market enforcement orders’ (instead of prosecution where evidence of a criminal labour market offence exists) requiring specific corrective action in a fixed timeframe.

- Pursue criminal sanctions including personal liability for corporate officers (e.g. CEO, CFO, COO) including fines or imprisonment for up to 51 weeks for intentional non-compliance.

- Bring employment tribunal claims on behalf of employees, even if the employee chooses not to (e.g. unfair dismissal, discrimination etc), and give legal assistance to employees with tribunal claims, recovering the costs from the employer.

- Giving false information or misleading an FWA officer is itself a criminal offence, carrying an unlimited fine and up to 51 weeks in prison.

The sensible next move? A self-audit.

Given the direction of travel of more proactive checks and higher personal stakes for those at the top, now is a better time than later to get things in order.

A good starting point is a compliance self-audit covering employment contracts, worker status, payroll and record keeping, holiday pay calculations, NMW compliance, SSP processes, and working time arrangements.

It'll help you spot the size of any issue, work out what needs fixing, and get your evidence to show you're compliant.

A few areas worth double-checking during your self-audit:

- You're paying, and have paid, NMW correctly.

- Deductions don't take pay below NMW, and you're paying for all time spent at work, including pre-shift check-ins, mandatory training, on-call time, etc.

- SSP rules are being followed, with evidence of how it was calculated and paid.

- Holiday pay calculations are accurate, especially for irregular hours or regular overtime, a genuinely high-risk area worth sorting during this transitional year. Remember, where a workers “normal remuneration” includes “regular” payments in addition to basic pay such as regular overtime pay and commission which is regular and linked to their normal job (but not including expenses), their holiday pay (during the first 4 weeks of their holiday entitlement) should include an amount reflecting those additional payments averaged over a 52-week reference period.

- Records clearly show, per employee, holiday taken, holiday carried over, how holiday pay was worked out, and any payments made on termination.

- Contracts and policies actually line up with day-to-day practice, particularly for staff on variable hours.

Complying isn't enough on its own; you need to be able to prove it too. Patchy record-keeping alone can amount to a criminal offence with unlimited fines.

The takeaway

The FWA's joined-up approach means a small issue in one area can quickly put the spotlight on others, so it pays to get ahead of things. That said, the signs suggest they'd rather help employers put things right than catch them out. Sort the basics now, and you'll be in a much stronger position when the fuller powers land in 2027.

If you're unsure whether your business is fully compliant or would like support reviewing your HR processes, our HR team can help.

Frequently Asked Questions

What is the Fair Work Agency (FWA)?

The Fair Work Agency is the UK's employment rights enforcement body, launched in April 2026. It brings together several existing enforcement functions into one organisation with responsibility for enforcing key areas of employment law, including National Minimum Wage, agency worker protections, and from 2027, Statutory Sick Pay and holiday pay.

Can the Fair Work Agency investigate my business without a complaint?

Yes. The Fair Work Agency has the power to carry out investigations proactively, meaning it does not need an employee to make a complaint before looking into potential breaches of employment law.

What records should employers keep?

Employers should maintain accurate records relating to pay, working hours, holiday entitlement and pay, Statutory Sick Pay, employment contracts and any relevant workplace policies. Good record keeping helps demonstrate compliance if the Fair Work Agency requests evidence.

Related HR Guides

- How HR software can help you to stay compliant, save time and reduce costs

- Common Employment Law Mistakes!

About the Author

Heidi Skirrow is the Founder and Director of Skora HR, bringing more than 25 years' experience in HR and employment law. Before founding Skora HR, she led HR Strategy & Operations for Carnival UK, supporting 17,500 employees across 60 labour markets. Today, Heidi works with SMEs across Bournemouth, Poole, Dorset and beyond, providing practical, commercially focused HR advice that helps businesses stay compliant, manage their people effectively and grow with confidence.