At a glance

• On 30 June 2026, the government launched a consultation on how the new Fair Work Agency (FWA) will enforce statutory holiday pay rights from 2027 under the Employment Rights Act (ERA).
• The FWA will be able to investigate underpayments, require repayment of arrears, issue penalties and promote compliance, while workers will retain the right to bring Employment Tribunal claims.
• The proposed enforcement regime would cover unpaid, underpaid or incorrectly calculated holiday pay, as well as situations where employers refuse leave or refuse to permit carry-over.
• The government proposes a six-year enforcement claim period and penalties of up to 200% of arrears per worker, subject to a maximum of GBP20,000 per worker.
• The consultation seeks views from workers and employers on compliance challenges, enforcement measures and the possible extension of the existing naming regime to holiday pay breaches.

On 30 June 2026 the government published a consultation paper on the proposed approach to upholding compliance with statutory holiday pay entitlement. The statutory right to holiday pay will be enforced from 2027 by the new FWA. The ERA provides for the FWA to have the power to uphold compliance with holiday pay law and to take enforcement action on behalf of workers. Enforcement by the FWA does not replace a worker's right to make a claim to the Employment Tribunal. The FWA will also provide a key educational role in supporting businesses through upskilling activities...

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