What Happens During a Fair Work Agency Inspection

FWA officers can arrive without notice. Here is what they look for, what they can demand, and exactly what to do when they knock on the door.

It is a Tuesday morning. Someone arrives at your reception and shows identification — a Fair Work Agency officer. They are conducting an inspection under their statutory powers. They want access to your payroll records, your employment contracts, and your holiday pay records. They also want to speak to some of your workers privately.

You have not received advance notice. You are not entitled to advance notice. This is how FWA inspections work.

The scenario is not hypothetical. The FWA launched on 7 April 2026 and inherited the enforcement infrastructure of three predecessor bodies: HMRC's NMW team, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate. It is operational, staffed, and has a mandate to inspect proactively rather than only responding to complaints.

Most employers will not be inspected in 2026. But some will. And the ones who are inspected without any preparation are the ones who make avoidable errors that turn an inquiry into a prosecution.

Your legal obligations during an inspection

FWA officers have statutory powers under the Employment Rights Act 2025 and the pre-existing legislation the FWA inherited. Those powers are substantial:

• Right of entry. An FWA officer can enter business premises at any reasonable time without a warrant and without advance notice. "Reasonable time" broadly means business hours, but it can include unusual hours if the nature of the business warrants it — a nightclub inspection can happen at 11pm.
• Demand for records. Officers can require you to produce any records, documents, or information relevant to compliance with the legislation they are enforcing. This includes physical documents and electronic records — payroll software, HMRC RTI submissions, email correspondence relevant to employment terms.
• Inspection of electronic systems. Officers can require access to computer systems that hold relevant records. They can take copies or printouts.
• Seizure of documents. Officers can seize documents (or copies) for use as evidence. They must give a receipt for anything seized.
• Worker interviews. Officers can speak privately to any worker on the premises. Workers have the right to speak to an FWA officer; the employer cannot prevent this.

Your legal obligation is to cooperate fully. That means providing access, producing records, and not interfering with worker interviews. Obstruction is a criminal offence under the relevant legislation.

The inspection power is not subject to judicial oversight at the entry stage. An officer does not need a court order to enter your premises, inspect your records, or speak to your staff. Refusing to cooperate is not a legal option — it is a criminal offence.

What FWA officers look for

In the current phase of FWA operations, the primary enforcement focus is National Minimum Wage compliance. NMW enforcement was the HMRC team's core function, and the FWA inherited that mandate. Officers will typically want to examine:

Payroll records and NMW compliance evidence. This means payroll records showing the gross hourly rate paid to each worker, cross-referenced against the hours worked. For workers paid by the hour, the calculation is straightforward. For salaried workers, officers divide the annual salary by the total hours worked (including any unpaid overtime) to calculate the effective hourly rate. Employers who require workers to attend before their paid start time, remain after their paid end time, or complete training unpaid are common targets.

Employment contracts and written statements. Under the ERA 2025, all employees must receive a written statement of employment particulars on or before their start date. Officers will check whether these are being provided, whether they include all mandatory information (the list is detailed — see ERA 2025 and Employment Rights Act 1996 s.1), and whether the contract terms reflect actual working arrangements.

Holiday pay records. As covered in our separate article on this topic, the ERA 2025 made inadequate holiday records a criminal offence. Officers will check whether records exist for all workers and whether they capture entitlement, accrual, usage, and pay calculation.

Right-to-work documentation. FWA officers work alongside Home Office enforcement teams in some cases. Expect right-to-work checks to come into scope, particularly for businesses in sectors with higher rates of illegal working (hospitality, construction, agriculture, cleaning).

Working time records. The Working Time Regulations require employers to keep records to demonstrate compliance with the 48-hour average working week limit (for workers who haven't opted out), rest period requirements, and daily rest requirements. Officers can request these records.

Zero-hours contract documentation. The ERA 2025 contains new provisions on zero-hours contracts, including requirements for guaranteed hours offers after a qualifying period. These provisions are not yet fully in force (secondary legislation is awaited), but officers may examine existing zero-hours arrangements for compliance with the rules that are in force.

The worker interview

This is the part of an FWA inspection that most employers find most unsettling. Officers can speak privately to any worker on the premises, without the employer present. Workers have legal protection against retaliation for cooperating with an FWA investigation — dismissing or otherwise penalising a worker for speaking to an officer is automatically unfair dismissal and could constitute a criminal offence.

What workers say in these interviews matters. An employer whose workers describe being required to work unpaid overtime, or who say their payslips don't reflect actual hours worked, is in a more difficult position than an employer whose records are clean. Officers are experienced at identifying inconsistencies between employer records and worker accounts.

The appropriate approach is not to brief workers on what to say — that is a form of obstruction. It is to have a workplace where the records accurately reflect reality, and where workers know their rights and are treated fairly. Workers who are treated well and paid correctly have no incentive to tell stories that differ from the employer's records.

What NOT to do

Several instinctive responses to an unexpected inspection are counterproductive or illegal:

• Don't refuse entry. You cannot refuse an FWA officer entry to your premises. Doing so is obstruction. Call your employment solicitor while you cooperate — not instead of cooperating.
• Don't destroy or conceal documents. Destroying documents after becoming aware of an investigation (or likely investigation) is evidence tampering and a serious criminal offence. Do not delete files, shred paperwork, or move records off-site once you know an officer has arrived.
• Don't attempt to coach staff. Any attempt to influence what workers say to an FWA officer — whether explicit ("tell them you work 40 hours, not 50") or implicit ("make sure the story is consistent") — is obstruction. It is also likely to make things worse, because workers under pressure often break.
• Don't lie. An employer who produces false records, gives false information to an officer, or knowingly states something untrue has committed a criminal offence separate from any original compliance issue.
• Don't lose your temper. FWA officers have a job to do. Hostility, aggression, or obstructive behaviour creates a worse record than calm cooperation. Treat it like a financial audit — cooperate professionally, take notes, and get advice.

What to do: the reception procedure

There should be one person in your business who is the designated point of contact for regulatory inspections. This person should know what to do when an official arrives. In a small business, this is typically the owner or the most senior manager on site. In a larger business, it might be an HR manager or a COO.

That person should:

• Ask to see the officer's identification and note their name, badge number, and the agency they represent
• Ask for the purpose of the visit and the statutory basis for the inspection
• Take the officer to a suitable meeting room while the designated point of contact is located
• Call the business owner or senior manager, and ideally an employment solicitor, at the earliest opportunity
• Cooperate fully with access and record requests
• Keep a contemporaneous note of everything requested and everything produced

You are entitled to have a legal adviser present during an inspection. You cannot delay the inspection to wait for one — but you can contact your solicitor immediately and ask them to attend or advise by phone while the inspection proceeds.

After the inspection: timelines and next steps

After an inspection, the FWA officer will typically provide a summary of what was examined and what, if anything, was identified as potentially non-compliant. This may happen at the end of the visit or in writing shortly afterwards.

If no issues are identified: the inspection is closed. Keep the record of the visit and any documentation you provided.

If issues are identified: the FWA will follow a process. The typical sequence is:

1. Notification of potential non-compliance. The FWA writes to notify you of its findings and gives you an opportunity to respond. This is not a penalty notice — it is an opportunity to provide additional evidence or context.
2. Compliance notice. If the FWA is satisfied that a breach has occurred, it can issue a compliance notice requiring you to take specific steps to remedy it. The notice will specify a timeline.
3. Penalty notice. For financial penalties — most commonly NMW arrears plus the 200% penalty — the FWA will issue a formal penalty notice. You have a right of appeal to an Employment Tribunal within 28 days.
4. Criminal prosecution. For serious, deliberate, or repeat breaches, the FWA can refer the matter for criminal prosecution. This applies to employers who falsify records, repeatedly breach NMW, or obstruct the investigation.

The penalty escalation

The dawn raid protocol

Print this and keep it at reception. This is the ten-step procedure for when an FWA officer arrives unannounced.

The preparation question

The FWA inspection protocol above is useful in the moment. But the more important question is what happens before an officer ever arrives. An employer with clean, complete records, accurate employment contracts, and a consistent payroll process has nothing to fear from an inspection — or at least, very little. The inspection will be brief, the officer will find nothing actionable, and the visit will close without consequence.

An employer without those things faces a different inspection. Officers are skilled at identifying gaps. A payroll file that can't demonstrate NMW compliance for overtime workers is a finding. Employment contracts that still reference waiting days for SSP are a finding. Holiday pay records that track leave requests but not entitlement calculations are a finding.

The cost of getting records in order before an inspection is small. The cost of remedying a penalty notice — 200% of arrears for every affected worker, plus legal fees, plus the time cost of responding to the FWA's process — is considerably larger.

Sources

• GOV.UK — Fair Work Agency enforcement policy statement
• GOV.UK — Fair Work Agency factsheet (PDF)
• Employment Rights Act 2025 (legislation.gov.uk)
• GOV.UK — NMW enforcement policy
• GOV.UK — ERA 2025 implementation timeline
• Acas — National Minimum Wage guidance