Fair Work Agency
The Fair Work Agency (FWA) is a new enforcement body, established on 7 April 2026 under the Employment Rights Act 2025 (the 2025 Act). The FWA is not a standalone body, but an Executive Agency of the Department of Business and Trade.
The FWA will bring several existing enforcement functions into one agency, including enforcement duties previously carried out by HMRC, the Gangmasters and Labour Abuse Authority and the Employment Agency Standards Inspectorate. The FWA will therefore have an initial remit of enforcing National Minimum Wage (NMW) underpayments, Agency standards, Gangmaster Licencing, and serious labour abuse and exploitation covered by the Modern Slavery Act. It also has a new role in relation to enforcement of Employment Tribunal awards.
The intention is that the scope of the FWA’s remit will expand further, to take on responsibility for upholding other statutory rights such as holiday pay and statutory sick pay. This part of its remit is expected to commence later this year or early next year.
Investigation Powers
FWA Enforcement Officers have powers to conduct investigations under the 2025 Act. Investigations may involve requests for information, inspection of records, interviews with workers or business representatives and visits to business premises. While visits will generally be conducted consensually, the FWA does have powers to carry out investigations unannounced.
Underpayments and Civil Penalties
The FWA will be authorised to issue Notices of Underpayment to employers for breaches of certain rights to pay. Currently, this relates to NMW breaches, but this will expand to holiday pay and statutory sick pay once these come within the remit of the FWA. Such notices will require the worker to be paid the outstanding sum and require a penalty to be paid to the government.
The maximum penalty for such underpayments is 200% of the value of underpayment, up to a maximum of £20,000 per worker who has been underpaid. Where the value of such penalty is less than £100, a minimum penalty of £100 is to be applied. Employers will be able to have the penalty reduced by half if 50% of the penalty is paid and all underpayments are corrected in full within 14 days.
Undertakings and naming offenders
The FWA may also issue Labour Market Enforcement Undertakings (LMEU) where it believes there has been a breach of labour market offences within the FWA’s enforcement remit. The FWA will also operate naming scheme for offending employers.
For more information, please contact a member of our Employment Team who will be happy to assist.
See also:
Employment Act 2025: key employment law changes from 6 April