On 7 April 2026, a new Fair Work Agency was established through the Employment Rights Act 2025. 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. Let’s take a look at what we know about the Fair Work Agency (FWA) so far and what it means for employers.
Remit of Fair Work Agency
Upon its establishment, the FWA combined the powers of former Government bodies into a single entity, including:
- Gangmasters and Labour Abuse Authority (in relation to gangmaster licensing and labour exploitation)
- Employment Agency Standards Inspectorate (in relation to agency workers)
- National Minimum Wage enforcement team (part of HMRC)
- Office of the Director of Labour Market Enforcement.
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. To ensure continuity of service, HMRC will initially continue to deliver NMW enforcement, with the aim of a full transfer of NMW functions by April 2027.
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.
Powers and enforcement mechanisms
The FWA, working with the HMRC enforcement team initially, will 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.
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.
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.
Employers should keep an eye on further developments involving the FWA as they will need to become accustomed to dealing with this new regulatory body.
