April is just under a week away and we hope you are all fully prepared in advance of the employment law updates coming in to force. As part of the Employment Rights Bill changes, there will be a new enforcement body, the Fair Work Agency. The Government are introducing this to oversee a range of employment rights.
The Department of Business and Trade announced the nine board members today who will be part of the advisory board. As part of this, there will be an equal amount of members with employer, independent, and trade union backgrounds. This is in place to ensure the experience of businesses, staff, and victims of exploitation will be focused on fairly.
In this blog post, we will explore exactly what the agency is, and what this means for you business.
What is the Fair Work Agency?
This new enforcement body will launch on 7th April 2026 to enforce workers rights such as sick pay, minimum wage, and holiday pay. They will do this by consolidating other existing bodies such as HMRC and GLAA. The FWA will act as a central authority to investigate exploitation, inspect workplaces, and impose penalties on employers who are proven to be non-compliant.
Main enforcement powers include:
- Inspecting business premises to inspect records such as contracts and payroll
- Issue underpayment notices asking employers to reimburse wages
- Acting on the behalf of workers by taking employers to employment tribunals
- Overseeing compliance in labour supply chains
What does this change?
- HMRC has been responsible for enforcing the National Minimum Wage up until now. From April 2026, this will transfer to the Fair Work Agency.
- The Fair Work Agency will have the power to investigate workplaces, and issue penalties for underpayments.
- They will be able to take legal action to enforce rights relating to minimum wage, holiday pay and statutory sick pay.
- A single, centralised body for workplace rights enforcement, helping to create a more consistent and less fragmented approach.
- The Government hopes this will reduce the number of breaches going undetected, particularly protecting lower-paid workers from missing out on fair pay.
Looking ahead, the Agency is expected to expand its remit further, taking on a broader role in employment rights enforcement and supporting both employers and employees to navigate an increasingly complex regulatory landscape.
Why is the new FWA Important?
The Fair Work Agency is important as it it has the power to enforce tougher penalties of up to 200% of wages not received. They can enter the workplace to recover the enforcement costs and to undertake an investigation.
Common areas where National Minimum Wage risks are particularly high include salary sacrifice arrangements. This can be situations where employees work unpaid hours (including overtime), and where deductions are made from wages for accommodation or other expenses.
No Room for Mistakes
In addition to these changes, HMRC is also tightening the scope for employers to correct National Minimum Wage errors. Before the introduction of the FWA, HMRC often provided a level of support to help employers identify and rectify failings before issuing penalties.
This typically involved direct engagement to review practices and correct errors without immediate financial consequences.
The removal of this approach means significantly less leniency. Organisations are now more likely to face penalties without the opportunity to correct mistakes beforehand. In some cases, businesses may also be publicly named and shamed.
In practical terms, by the time HMRC or the Fair Work Agency makes contact, it may already be too late to avoid enforcement action. Therefore, taking a more proactive approach is essential.
How to Prepare for the Introduction of the Fair Work Agency?
With enforcement becoming more robust, now is the time to review your processes and ensure full compliance. Key steps include:
- Conduct a National Minimum Wage audit
Review pay practices, working hours, and deductions to ensure compliance across all employee groups. - Review contracts and policies
Ensure employment contracts, handbooks, and policies reflect current legal requirements. - Check payroll processes
Confirm that payroll systems accurately calculate pay, including variable hours, overtime, and deductions. - Train managers and HR teams
Make sure those responsible for managing staff understand the risks and requirements. - Assess labour supply chains
If you use agency workers or third-party labour providers, ensure they are also compliant. - Document everything
Keep clear and accurate records in case of inspection.
Contact Us
If you would like support preparing for the introduction of the Fair Work Agency, or want help reviewing your current practices, our team is here to help. Get in touch today to ensure your business is fully compliant and ready for April’s changes.
