How to remain compliant to the Fair Work Agency 

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The Fair Work Agency (FWA) launched in April 2026 and has become the UK’s single labour-market enforcement body.  

It consolidates minimum wage enforcement, agency worker protections, gangmasters licensing, statutory sick pay compliance and importantly; state enforcement of holiday pay. 

Employers searching for guidance need to understand what has changed, the records they must keep and how to avoid enforcement action. 

Our latest blog explains the FWA’s remit, its inspection powers and the practical steps you should be prepared to take. 

The Fair Work Agency Explained 

The FWA brings together enforcement functions previously handled by HMRC, the Employment Agency Standards Inspectorate and the Gangmasters & Labour Abuse Authority. 

It enforces: 

• National Minimum Wage and National Living Wage 

• Holiday pay and annual leave record‑keeping 

• Statutory Sick Pay compliance 

• Employment agency regulations 

• Gangmasters licensing and labour exploitation protections. 

The agency’s purpose is to secure compliance, protect workers and ensure fair competition by preventing rogue employers from undercutting compliant businesses. 

What Compliance Areas Do Employers Need to Review? 

To reduce audit risk, employers should focus on five key areas: 

• Holiday pay records – you now need a six-year retention 

• Accurate minimum-wage calculations 

• SSP eligibility and payment processes  

• Agency-worker contracts and transparency  

• Supply-chain due diligence for labour exploitation. 

What are the consequences of not being compliant? 

Non-compliance with the Fair Work Agency means an employer hasn’t met legally required employment standards, which can trigger investigations, financial penalties, orders to repay underpaid wages, enforceable undertakings and mandatory corrective actions. 

By being non-compliant you also risk damaging employee trust, increasing workplace disputes, disrupting operations through audits and harming your organisation’s reputation if breaches becoming public. Being compliant is essential for legal protection and helps to maintain a fair, safe and credible workplace. 

Why Enforcement Risk Is Increasing 

The FWA adopts a proactive inspection model, especially in high-risk sectors. 

It can: 

• Inspect workplaces and require documents 

• Issue Notices of Underpayment  

• Bring civil proceedings 

• Pursue serious exploitation cases 

• Escalate persistent breaches quickly. 

This marks a change from a system reliant on individual tribunal claims to one where the state actively investigates and enforces compliance. 

FAQs 

What triggers an FWA inspection? 

Inspections may be proactive in high-risk sectors or reactive following worker complaints or intelligence about non-compliance. 

Does the FWA create new legal obligations? 

No. It enforces existing rights but does so more consistently and with stronger investigative powers. 

Is holiday pay now state-enforced? 

Yes. For the first time, holiday pay enforcement sits with the FWA, and employers must keep six years of records. 

Does the FWA cover all UK nations? 

Mostly, some functions, such as modern slavery offences and agency regulation in Northern Island remain devolved. 

Will compliant employers be affected? 

Compliant employers should experience minimal disruption, but inspections may operate differently and require stronger documentation. 

 Get Prepared and Speak to our Employment Law Specialists 

If you want to ensure your organisation is fully prepared for Fair Work Agency enforcement, employment law solicitors from Bowcock & Pursaill can help. 

Our team provide compliance audits, policy updates and practical guidance tailored to your sector. Contact us now and stay ahead of regulatory change.