The Government’s new Fair Work Agency, launched on 7 April 2026, brings together the enforcement of key employment rights into one place.
Wake Smith’s employment solicitor Charlotte Wallage looks at the FWA’s role, its investigative and compliance powers and what employers need to do as a result of it now being up and running.
Taking these steps now will help put employers in a stronger position should scrutiny arise, and will help mitigate, and reduce, the risk of potential penalties and workplace disruption.
This article covers:
- What is the Fair Work Agency?
- What is it responsible for?
- What will the FWA do?
- What this means for employers?
- How will compliance be monitored?
- How Wake Smith can help you
What is the Fair Work Agency?
The Fair Work Agency (FWA) now acts as a new single, recognisable body for compliance with the Employment Rights Act 2025 (ERA 2025).
What is it responsible for?
- Setting and enforcing minimum workplace standards
- Promoting compliance of employment law, and
- Investigating suspected breaches of employment law.
It will gradually take on additional responsibilities, including enforcement of the national minimum wage, holiday pay and statutory sick pay (SSP).
The agency now has powers to investigate breaches, issue civil penalties and take action against labour exploitation.
The Fair Work Agency will not create new legal obligations, but the way in which inspections are carried out and breaches are enforced, may operate differently.
What will the FWA do?
The FWA will investigate whether employers are:
- Paying the correct, contractually entitled to, salary.
- Paying it at a rate on or above the National Minimum Wage, and
- Paying SSP
- Giving the correct holiday pay and annual leave allocation - through written records of each worker's annual leave entitlement and details of when/how holiday pay has been calculated and paid for six years.
It will also review whether employers have failed to pay all, or part, of employment tribunal awards.
What this means for employers?
Employers who already follow good practice should not be affected.
However, employers should:
- Familiarise themselves with the FWA's enforcement policy statement.
- Review compliance with existing employment rights (e.g. National Minimum Wage, holiday pay, agency worker regulations).
- Review record keeping policies and keep appropriate records to confirm legal obligations as an employer including payroll records.
- Ensure robust systems for requesting and monitoring annual leave, including systems for accurately recalculating leave entitlement for workers who do not work full-time hours.
- Assess whether day-to-day practices align with contractual terms and written policies, as discrepancies could lead to enforcement action.
- Check workers can easily access information about wages and annual leave, aligning with their employment contract.
How will compliance be monitored?
It is expected the FWA will monitor employer compliance by contacting employers to arrange an audit of their business.
Individuals may be required to attend interviews, answer questions and provide information or documents where relevant.
Monitoring will initially be targeted at high-risk industries and sectors with poor compliance records.
Its wide ranging enforcement powers include:
- FWA officers may enter a business' premises at a reasonable time to inspect records and equipment, and seize documents.
- The FWA will seek labour market enforcement undertakings where it believes a labour market offence has been committed.
- The Secretary of State, on recommendation by the FWA, will be able to issue a notice of underpayment to an employer that has failed to pay the correct amount of wages, SSP or holiday pay to a worker. The notice will require the employer to pay to the worker the outstanding amount within 28 days of issue.
- Additionally, the Secretary of State may require the liable business to pay a penalty calculated at 200% of the sum specified in the notice of underpayment, subject to a maximum of £20,000 and a minimum of £100.
- The Secretary of State will also have powers to bring employment tribunal proceedings on behalf of a worker, and to provide legal assistance to a worker who becomes party to civil proceedings relating to employment-related matters. These powers are not yet in force.
How Wake Smith can help you
Employers wanting to discuss the implications of the new Fair Work Agency on their business should contact Wake Smith’s employment team, Contact us online here, or call us on 0114 266 6660.
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