The Fair Work Agency — the quietly radical reform set to reshape UK employment enforcement

While most businesses have spent months preparing for the Employment Rights Act, one of its most transformative elements has slipped almost entirely under the radar. Attention has focused on headline changes but a new enforcement body — the Fair Work Agency — has now been written into law and could fundamentally reshape how workplace rights are monitored and enforced across the UK.

Here, employment and recruitment specialists Hannah Morrison and Simon Whitehead discuss what the Fair Work Agency is, what powers it’ll hold and what businesses should be doing now to prepare.

A new body built from existing parts

Although the Fair Work Agency is being presented as a consolidation exercise, the detail suggests something far more significant.

The Government intends the agency to bring together several existing enforcement bodies, including:

• The HMRC National Minimum Wage enforcement team.
• The Employment Agency Standards Inspectorate (EASI) which regulates employment agencies and employment businesses.
• The Gangmasters and Labour Abuse Authority (GLAA) which oversees licensing in agriculture and food supply chains.

The agency will launch in April 2026 and while the foundations are familiar, the scope of its eventual powers suggests that the Government may be preparing for a different approach — one in which collective enforcement is given a greater role in compliance.

Wide‑ranging powers that could transform enforcement

What’s already clear is that the Fair Work Agency will have a more cohesive approach to compliance. 

Moving forward, its powers will include:

• Inspecting and enforcing compliance with National Minimum Wage, holiday pay, statutory sick pay and unlawful deductions from wages.
• Entering businesses to conduct inspections.
• Demanding access to records.
• Interviewing staff.
• Issuing notices of underpayment.
• Requiring back pay to be settled within 28 days.
• Applying penalties of up to 200% of underpayment.

The most significant shift is that the Fair Work Agency will be able to bring employment tribunal claims on behalf of workers.

For the UK where collective or third‑party action isn’t the norm, this marks a major change in the enforcement of employment related laws. Many businesses have never faced this type of enforcement dynamic before.

Familiar territory for some sectors but wider reach than ever

Recruitment and workforce solutions businesses may recognise elements of the new regime. Many already deal with the GLAA or EASI. However, the Fair Work Agency’s remit will be far broader, extending these enforcement powers across the labour supply chain and a much wider range of industries.

The real test will be resourcing. The agency’s impact will depend heavily on whether it’s staffed and funded well enough to carry out inspections, bring claims and pursue enforcement at scale.

One particularly striking proposal is the possibility that businesses who breach the rules could be charged for the costs of enforcement action by the Fair Work Agency. This would be a major departure from the current system where penalties exist but enforcement costs aren’t charged to employers. While the Government hasn’t yet confirmed how this would work, the direction of travel is clear and potentially expensive.   

The expansion of the Fair Work Agency’s powers will be subject to consultation and, in the early stages, the focus will be on bringing together the current enforcement bodies. For now, we expect it to be largely business as usual.

What businesses can do now

Although the full detail is still to come, businesses are already considering what they need to do to prepare. The advice at this stage is straightforward: get your house in order.

If your organisation is among the first to be inspected, you’ll need to demonstrate:

• Correct payment of National Minimum Wage.
• Accurate and compliant statutory sick pay (with rules changing in April).
• Correct calculation and payment of holiday pay.
• Up‑to‑date contractual documentation.
• Clear, accessible records that can be produced quickly on request.
• Updated processes and policies reflecting current legal requirements.

While there’s nothing radical to implement yet, these fundamentals will matter more than ever.

Looking ahead 

The Fair Work Agency is expected to generate significant media attention when it launches in April 2026, accompanied by position statements and public messaging as it establishes itself.

Combined with the wider reforms introduced through the Employment Rights Act, 2026 is shaping up to be a pivotal year for employment law in the UK.

For compliant, well‑run businesses with strong documentation, there should be little to fear. For those with gaps in their processes, the new regime could be both costly and unforgiving.

Talk to us

As the new regime takes shape ahead of April 2026, employers will need to ensure that their systems, documentation and pay practices can withstand scrutiny from a regulator that can inspect records, issue penalties, demand back pay and even bring tribunal claims on behalf of workers.

Our employment and specialist recruitment and workforce solutions teams are advising employers and other businesses involved in the labour supply chain as they prepare for these changes and maintain compliance while the Employment Rights Act continues to be rolled out. 

We help organisations to:

• Review and update pay practices to ensure compliance with National Minimum Wage, holiday pay and statutory sick pay legislation.
• Audit workforce documentation so contracts, policies and onboarding processes are effective, up to date and ready for inspection.
• Prepare HR, procurement and legal teams for the Fair Work Agency’s new inspection and enforcement powers.
• Navigate labour supply chain risks, including agency workers, temporary staff and complex workforce models.
• Manage disputes, investigations and regulatory engagement where issues arise.
• Understand how the wider Employment Rights Act reforms — including changes to sick pay, parental leave, unfair dismissal and flexible working — need to be incorporated into documents and working practices to reduce the risks of issues by the Fair Work Agency’s new enforcement landscape.

Talk to our team by calling 0333 004 4488, emailing hello@brabners.com or completing our contact form below.