At a Glance

• The UK Government launched a consultation on June 30, 2026 on the Government’s proposed approach to statutory holiday pay compliance and enforcement by the Fair Work Agency (FWA) from 2027.
• The Government is proposing that statutory holiday pay compliance and enforcement will be “highly supportive with an emphasis on helping businesses to comply with the law and only taking punitive action where necessary.” However, the FWA is set to have some significant enforcement tools, including the ability to investigate holiday pay claims going back up to six years and a strong civil penalty regime for non-compliance.
• The consultation is open until September 22, 2026.

What is the FWA?

The FWA was established on April 7, 2026 under the Employment Rights Act 2025 (ERA 2025) as a new state enforcement agency of the Department for Business and Trade, bringing together existing labour market enforcement functions. It has significant statutory enforcement powers to investigate non-compliance, including to: enter and inspect workplaces, require the production of documents and evidence, issue notices of underpayment (requiring the employer to pay workers for underpayments) and impose civil penalties. Over time, the FWA’s powers will also expand and the FWA will take on responsibility for enforcing a wider range of employment rights, including statutory holiday entitlement, pay, and the requirement to keep annual leave records. Please see our previous article for further...

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