In April 2026, the Employment Rights Bill (ERB) will establish the Fair Work Agency (FWA), a new single enforcement body for employment rights. The FWA aims to transform how employment rights are enforced across the UK. We explain how the new rights will work and what employers can do to prepare.
The FWA will bring together the work of existing state enforcement bodies to oversee compliance with the national minimum wage, the regulation of employment agencies, licensing standards for gangmasters and enforcing unpaid employment tribunal awards. But that’s not all. There will be new powers to enforce failure to pay statutory holiday and statutory sick pay. From 2027, the FWA will oversee the regulation of umbrella companies. Over time, the FWA will take on enforcement of a wider range of employment rights.
The FWA will be able to issue notices of underpayment of non-payment of any statutory payment (e.g. statutory sick pay, holiday pay or national minimum wage), requiring payment within 28 days, plus a 200% penalty. Underpayments may go back 6 years from the date of the notice.
Employers should conduct a thorough compliance check ahead of the FWA becoming operational in April 2026. The government has said that the FWA will be “using new powers to ensure the estimated 900,000 people who have holiday pay withheld each year finally receive it” and “cracking down on those employers failing to pay the minimum wage”, so it seems likely that these...
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