What is the Fair Work Agency and what does it enforce?
The Fair Work Agency is the government body set up on 7 April 2026 to enforce certain workers' rights. It enforces the National Minimum Wage and National Living Wage, regulates employment agencies and businesses, licenses labour suppliers to agriculture and food, tackles serious labour exploitation and penalises unpaid tribunal awards. Holiday pay enforcement is expected to begin in 2027.
Where it came from
The Employment Rights Act 2025 created the framework for the agency. It brings together the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority, the Office of the Director of Labour Market Enforcement and HMRC's National Minimum Wage enforcement. HMRC continues to carry out minimum wage enforcement under contract until the full transfer from April 2027.
Its powers
The agency says it helps employers comply and takes action where they do not. It can:
- inspect and investigate employers
- require employers to put things right
- issue penalties and fines
- prosecute serious offences
- issue a warning notice when an employer has not paid an employment tribunal award, with a possible fine if the employer does not respond within 28 days
Wider remit to come
The Act also allows notices of underpayment requiring employers to pay sums owed under statutory pay provisions, and lets the agency bring employment tribunal proceedings on a worker's behalf. GOV.UK says holiday pay and statutory sick pay enforcement will follow in later stages, and the agency's delivery plan expects holiday pay enforcement to begin in 2027.
The agency does not give general HR advice or replace employment tribunals. Acas still handles employment rights advice and early conciliation.
The law
“requiring the liable party to pay the required sum to the underpaid individual…”
“the Secretary of State may, in place of the worker, bring proceedings about the matter in an employment tribunal…”
Sources
- About us - Fair Work Agency · GOV.UK
- Fair Work Agency delivery plan 2026 to 2027 · GOV.UK
- Factsheet: The Fair Work Agency · GOV.UK
- Make a claim to an employment tribunal · GOV.UK
- Employment Rights Act 2025 · Acas
General information for employers in Great Britain, not legal advice. Check the official sources for your situation.
- Fair Work Agency established
- Minimum wage enforcement staff join the agency from HMRC
Future dates are expected dates and depend on Parliament.
What employers can do
- Check that every worker is paid at least the National Minimum Wage or National Living Wage
- Keep annual leave and holiday pay records for at least six years, as required from 6 April 2026
- Check that any agency or labour supplier you use is properly licensed where required
- Pay any tribunal award or Acas settlement on time
- Review holiday pay calculations before enforcement begins
Related answers
- What are the current National Minimum Wage and National Living Wage rates? From 1 April 2026 the hourly rates are £12.71 for workers aged 21 and over (National Living Wage), £10.85 for ages 18 to 20, £8 for under-18s and £8 for apprentices. The rates usually change each April.
- How should employers calculate holiday pay, including for irregular hours? Workers get a week's pay for each week of statutory leave, usually averaged over the previous 52 paid weeks where pay varies. For irregular-hours and part-year workers, leave accrues at 12.07% of hours worked in each pay period, and all their leave is paid at their 'normal' rate.
- What is changing under the Employment Rights Act 2025, and when? The Employment Rights Act 2025 is being brought in by phases. Day-one paternity and parental leave, sick pay changes and six-month tribunal time limits already apply. Next come the stronger harassment duties on 30 October 2026, a six-month unfair dismissal qualifying period from 1 January 2027 and fire and rehire protections in March 2027. Future dates remain subject to Parliament.