What Is the Fair Work Agency?

The FWA launched on 7 April 2026. It consolidates three enforcement bodies into one, with powers to enter your premises without notice. Here is what it is, what it can do, and what you need to have ready.

On 7 April 2026, a new enforcement body began operating. The Fair Work Agency consolidates three previously separate regulators — HMRC's National Minimum Wage enforcement team, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate — into a single agency with expanded powers.

This is not a policy announcement. The FWA is operational. Its officers have powers they can exercise today.

What the FWA replaces

Before the FWA, employment enforcement in the UK was fragmented. If you underpaid the National Minimum Wage, HMRC investigated. If you ran an unlicensed gangmaster operation, the GLAA investigated. If you breached agency worker regulations, the EAS Inspectorate investigated. Three bodies, three sets of powers, three reporting structures.

The Employment Rights Act 2025 merged all three into the Fair Work Agency. The consolidation was not cosmetic. The FWA inherited all existing powers and gained several new ones.

What the FWA can do now

At launch, the FWA's active enforcement scope covers:

• National Minimum Wage compliance. The FWA can investigate whether you are paying at least £12.71/hour (for workers aged 21+) and can look back six years. Penalties are 200% of the underpayment, capped at £20,000 per worker.
• Labour market enforcement orders. Courts can impose orders requiring employers to take specific actions. Breaching an order is a criminal offence.
• Information-gathering powers. FWA officers can enter business premises, demand access to records including electronic systems, seize documents, and interview workers. They do not need to give advance notice.

The FWA can enter your premises without a warrant, demand access to your payroll systems, and seize copies of documents for use as evidence. This is not a future power — it is active now.

What is coming later

The FWA's remit will expand in stages. Enforcement of holiday pay and statutory sick pay compliance is confirmed but not yet active — the Department for Business and Trade timeline describes these as "later stages" without specifying dates. Enforcement of the new zero-hours contract provisions will follow the secondary legislation that enables those rights, expected in 2027.

The practical implication: even areas not yet enforced by the FWA specifically are still legal requirements. Holiday record-keeping, for example, is now a criminal offence under the ERA 2025 regardless of whether the FWA is the body that prosecutes it.

What the FWA means for SME employers

For a ten-person business, the FWA changes one thing: the likelihood that someone actually checks your records. The NMW enforcement team at HMRC was stretched thin. The FWA is designed to be more proactive — a single agency with a mandate to inspect, not just respond to complaints.

The records the FWA can demand are the records you should already have:

1. Payroll records demonstrating NMW compliance
2. Written statements of employment particulars (now required from day one)
3. Holiday pay records for all workers (now a legal requirement — criminal offence for non-compliance)
4. Sick pay records and your SSP policy
5. Right-to-work documentation
6. Working Time Regulations compliance evidence

If an FWA officer arrived at your business tomorrow and asked to see these six categories of records, could you produce them? If the answer is "probably, give me an hour," that is not a failing — but it is a gap worth closing before someone tests it.

The penalty structure

For NMW breaches, the penalty is 200% of the total underpayment, with a minimum of £100 and a maximum of £20,000 per worker. If paid within 14 days, the penalty reduces to 50%. Deliberate or repeated breaches can result in criminal prosecution, unlimited fines, and director disqualification.

The six-year lookback period means the FWA can investigate historical records, including for employees who have already left your business. If your payroll calculations were wrong three years ago, that liability still exists.

What to do now

The FWA is not a reason to panic. It is a reason to check that the documentation you should already have is actually in order. For most SMEs, this means three things:

1. Audit your records. Can you produce NMW compliance evidence, holiday records, and employment particulars on demand?
2. Update your policies. The ERA 2025 changed day-one rights for SSP, paternity leave, and parental leave. Your policies should reflect the current law.
3. Know the procedure. If an FWA officer does arrive, your staff should know what to do: cooperate, provide access to records, and contact a senior manager. Obstruction is a criminal offence.

Sources

• GOV.UK — Fair Work Agency enforcement policy statement
• GOV.UK — ERA 2025 implementation timeline
• GOV.UK — Fair Work Agency factsheet (PDF)