The Upcoming Fair Work Agency (April 2026)

A major change to the UK’s employment regulations is on the horizon. The Fair Work Agency (FWA) is a new body proposed under the Employment Rights Bill and is expected to be established in April 2026, subject to final legislative approval.

What will the FWA do?

The FWA is designed to simplify and strengthen enforcement of employment rights by bringing multiple oversight functions into one place. Currently, different agencies handle areas such as minimum wage, agency work, and holiday pay. The new agency will centralise those functions, creating a single authority focused on ensuring fair treatment and compliance across UK workplaces.

Why is the change happening?

For several years, the government has reviewed how worker protections are enforced. Feedback from employers, employees, and regulators highlighted a need for clearer guidance, more consistency, and stronger accountability.

The creation of the FWA reflects that feedback. The agency will not only respond to complaints but will also take proactive steps to investigate potential breaches. This shift aims to level the playing field for responsible employers, while targeting those who deliberately undercut compliance.

What will their key powers and priorities be? 

When established, the FWA will have authority to:

• Investigate employers proactively without needing a formal employee complaint

• Enforce compliance orders and recover costs from non-compliant employers

• Oversee agency, casual, and gig work arrangements to ensure workers are paid and treated fairly

• Coordinate enforcement of minimum wage, holiday, and sick pay standards

• Issue penalties or improvement notices where breaches are identified

These powers are intended to move from the current reactive model of enforcement to a continuous, risk-based oversight model.

What does this mean for employers?

The FWA’s arrival is expected to bring greater scrutiny, accountability, and potential cost exposure for employers who are not fully compliant. While responsible businesses may welcome a more consistent approach, the operational impact should not be underestimated.

Key implications include:

• More frequent audits and inspections of payroll, contracts, and agency arrangements

• Tighter standards for how temporary, agency, and gig workers are engaged

• Potential financial penalties and cost-recovery charges for proven breaches

• Increased record-keeping requirements to demonstrate compliance if inspected

In short, the agency’s role will be to ensure that compliance isn’t just a box-ticking exercise, but an ongoing part of responsible business practice.

How can I prepare my business for the change?

To minimise disruption and risk once the FWA becomes operational, employers are encouraged to begin preparation early:

• Review your employment policies and contracts

Ensure that policies covering pay, holiday, sick leave, and agency work are up to date and compliant with the latest legal standards.

• Conduct a compliance audit

Review how your organisation records working hours, pay, and leave. Identify any grey areas or inconsistencies, particularly around flexible or non-standard work arrangements.

• Train your managers and HR teams

Awareness will be key. Managers, HR teams, and payroll staff should understand both existing obligations and what the FWA is likely to expect.

• Strengthen your record-keeping

Accurate, accessible records are your best defence in the event of an investigation. This includes contracts, payslips, timesheets, and correspondence on leave or absences.

• Monitor developments

The Employment Rights Bill is still progressing through Parliament, and secondary regulations will clarify the FWA’s exact remit. Staying informed will help your business stay ahead of any new requirements.

What is the key takeaway for me as an employer?

The Fair Work Agency represents one of the most significant shifts in UK employment regulation in recent years. With its stronger powers, proactive approach, and unified structure, the FWA will reshape how workplace rights are enforced.

Employers who act now by reviewing their policies, auditing practices, and training teams will be best placed to meet these new expectations with confidence and minimal disruption.

Take the next step in protecting your business and employees. Please don’t hesitate to contact your designated HR Advisor — we're here to help.For guidance, speak to your HR Advisor: hr@skaltd.co.uk | 01427 402 403

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