From April 2026, workplace rights enforcement in the UK has changed significantly with the introduction of the Fair Work Agency (FWA). Created under the Employment Rights Act 2025, the FWA combines several existing enforcement bodies into one central regulator with wider powers and a more coordinated approach.
For employers, the focus is not necessarily on new rights, but on stronger enforcement and increased expectations around compliance, record keeping and payroll accuracy.
What is the Fair Work Agency?
The FWA is an Executive Agency of the Department for Business and Trade. It now oversees areas previously handled by separate bodies, including:
- National Minimum Wage and National Living Wage enforcement
- Agency worker and employment business regulation
- Labour exploitation and gangmasters licensing
The agency is also expected to take on wider enforcement responsibilities for holiday pay and statutory sick pay (SSP).
Key Changes for Employers
- Stronger Enforcement Powers
The FWA has broad powers to investigate non-compliance. These include:
- Workplace inspections
- Requests for employment and payroll records
- Investigations into historic breaches
- Financial penalties and enforcement notices
- Bringing Employment Tribunal claims on behalf of workers
An issue identified in one area of the business may now lead to wider scrutiny across payroll, working time and leave records.
- Holiday Pay and Record Keeping
From April 2026, employers must retain annual leave and holiday pay records for at least six years. Records should clearly show leave taken, carry-over arrangements and how holiday pay has been calculated.
- Changes to Statutory Sick Pay
SSP is now payable from day one of sickness absence, with waiting days removed. The Lower Earnings Limit has also been abolished, meaning more workers now qualify.
What This Means for Businesses
The FWA reflects a shift towards more proactive and coordinated enforcement of existing employment laws. Employers should expect greater scrutiny of payroll practices, worker status arrangements and record keeping procedures.
Many enforcement issues arise from outdated systems, inconsistent processes or informal working practices rather than deliberate underpayment. Businesses should therefore ensure policies and day-to-day practices align.
Practical Steps Employers Should Take
To reduce risk, employers should:
- Review payroll and minimum wage compliance
- Audit holiday pay calculations and leave records
- Update SSP policies and payroll settings
- Ensure records are accurate and retained for six years
- Review casual, agency and contractor arrangements
- Train managers to apply policies consistently
A proactive review now is likely to be far easier and less costly than responding to a formal investigation later.
Don’t hesitate to get in touch with Parfitt Cresswell today.