For many employers, keeping up with workplace legislation is challenging enough. Understanding who enforces those laws and what powers they have can be even more important. As part of the Employment Rights Act 2025 reforms, the Government is creating a new Fair Work Agency (FWA) to strengthen the enforcement of employment rights across the UK.The Fair Work Agency is expected to become operational from April 2026 and will bring together several existing enforcement functions under a single organisation. For employers, this means increased oversight, stronger enforcement powers and a greater focus on workplace compliance. In this guide, we explain what the Fair Work Agency is, why it is being introduced and what businesses should do now to prepare.
This article forms part of our Employment Rights Act 2025 Employer Guide, covering the key workplace reforms affecting UK businesses between 2025 and 2027.
The Fair Work Agency is a new government body that will oversee and enforce a range of employment rights. The aim is to create a more joined-up approach to workplace enforcement by bringing together responsibilities that are currently spread across multiple organisations. The Government has stated that the agency will help ensure workers receive the rights and protections they are entitled to while creating a clearer enforcement framework for employers.
Historically, employment rights enforcement has been fragmented, with different bodies responsible for different areas of workplace regulation. This has often created confusion for both employers and workers.
The Government intends for the Fair Work Agency to improve consistency, simplify enforcement and strengthen compliance across UK workplaces. The agency forms part of the wider "Plan to Make Work Pay" programme and supports the reforms introduced through the Employment Rights Act 2025.
The Fair Work Agency is expected to have a range of enforcement powers, including the ability to investigate potential breaches of employment rights.
Its responsibilities are expected to include enforcement relating to:
Statutory Sick Pay
National Minimum Wage
Holiday pay compliance
Labour exploitation
Agency worker protections
Modern slavery reporting and enforcement support
The Government has also indicated that the agency may have powers to recover certain payments directly on behalf of workers where employment rights have been breached. This represents a significant shift towards more proactive workplace enforcement.
Many employers already comply with employment legislation and maintain robust workplace policies. However, the creation of the Fair Work Agency increases the importance of having documented compliance processes and accurate employment records. Employers should expect greater scrutiny in areas such as:
Employee contracts
Payroll records
Holiday pay calculations
Sickness absence management
Working time compliance
National Minimum Wage compliance
Employment status assessments
Businesses that cannot demonstrate compliance may face increased regulatory attention and potential enforcement action.
One of the most effective ways to prepare for increased enforcement is through accurate record keeping. Employers should be able to demonstrate that they are meeting their obligations regarding pay, working hours, holiday entitlement, training and employee rights. Clear documentation can help reduce risk during investigations and provide evidence of compliance if concerns are raised. Organisations that rely on outdated policies, inconsistent record keeping or informal management practices may find themselves more vulnerable to enforcement action.
The best approach is to review workplace compliance before the Fair Work Agency becomes fully operational.
Employers should consider:
Reviewing contracts and employee handbooks
Auditing holiday pay and payroll processes
Assessing SSP compliance
Reviewing National Minimum Wage procedures
Ensuring managers understand employment law obligations
Updating workplace compliance training
Preparation now can help reduce risk and demonstrate a proactive commitment to compliance.
The Fair Work Agency will increase the importance of workforce compliance, manager knowledge and employment law awareness.
Circle Academy helps organisations prepare through:
Employment Law Fundamentals Training
Workplace Compliance Training
Leadership and Management Courses
HR and Manager Development Programmes
Equality, Diversity and Inclusion Training
Mental Health Awareness Training
With more than 160 accredited courses available online and in person, we help employers build compliant, competent and confident teams.
The information in this article is intended as general guidance for employers and managers. It should not be relied upon as legal advice. Employment law is subject to change, and the application of legislation may vary depending on individual circumstances. If you are unsure how the Employment Rights Act 2025 may affect your organisation, we recommend seeking appropriate legal or professional advice.
This article is based on guidance and implementation plans published by the UK Government and ACAS.
UK Government – Employment Rights Act Implementation Roadmap
UK Government – Employment Rights Act Factsheets
https://www.gov.uk/government/publications/employment-rights-bill-factsheets
ACAS – Discipline and Grievance Guidance
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