The Fair Work Agency Has Launched — Here's What It Can Check (And Who It's Targeting First)

The Fair Work Agency officially launched today, April 7, 2026. It is a new government enforcement body with powers that no previous UK employment regulator has had in the same form: it can visit your business, inspect your records, and issue penalties — without a single worker complaint.

This is not a warning. This is the new reality.

Here's exactly what the FWA can check, which sectors it's likely to target first, and what you need to have ready if an inspector knocks.

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Table of Contents

1. What Is the Fair Work Agency?
2. Why the FWA Is Different From HMRC Enforcement
3. What the FWA Can Inspect
4. Which Sectors Are Being Targeted First?
5. What Records You Need Ready
6. What Happens During an Inspection?
7. Penalties — What the FWA Can Do
8. 7 Things to Have in Order Today
9. FAQs

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What Is the Fair Work Agency?

The Fair Work Agency is a new government body established under the Employment Rights Act 2025. It consolidates several existing enforcement functions — including parts of HMRC's minimum wage enforcement — under one organisation with expanded powers and a proactive inspection mandate.

It is specifically designed to address the enforcement gap where workers didn't complain about wage theft, illegal sick pay deductions, or holiday pay errors because they feared losing their jobs. The FWA doesn't need a complaint to act. It can simply decide to inspect your sector.

Its stated priorities from launch are:

• National Living Wage and National Minimum Wage compliance
• Statutory Sick Pay (SSP) — now payable from day one of absence
• Holiday pay — including the new 6-year records retention requirement
• Zero-hours and casual worker rights

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Why the FWA Is Different From HMRC Enforcement

HMRC's minimum wage enforcement team has existed for years. The difference is scale, mandate, and proactivity.

Old model (HMRC): Investigate when a worker complains. Reactive. Resource-limited.

New model (FWA): Proactive sector sweeps. Intelligence-led targeting. Cross-reference SSP, holiday pay, and wages in a single visit. Can compel document production. Can enter premises.

The government's own language when announcing the FWA was: "harder to slip through the cracks." That phrase tells you everything.

HMRC named and shamed 389 employers in March 2026 — including Costa (£149,851 for 2,759 workers), Bupa Care Services (£364,103 for 2,463 workers), and Hays Travel. The FWA has those same powers, plus more.

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What the FWA Can Inspect

An FWA inspector can request and review:

Wages and Pay Records

• Payroll records for all workers, including zero-hours and variable-hours staff
• Evidence that the National Living Wage (£12.71/hour from April 1) is being correctly applied
• Evidence that unlawful deductions aren't eating into minimum wage entitlement (uniforms, tools, salary sacrifice arrangements)
• Payslips showing correct NLW/NMW categorisation

Statutory Sick Pay

• Whether SSP is being applied from day one (mandatory since April 6)
• Whether workers who previously didn't meet the Lower Earnings Limit are now being paid SSP
• Written sick leave policies — any document referencing the old 3-day waiting period is evidence of non-compliance

Holiday Pay and Records

• Holiday pay calculation method (must include regular overtime in the calculation)
• Holiday records going back 6 years — this is a new mandatory retention period from April 6
• Evidence that all workers, including zero-hours staff, are receiving their correct holiday entitlement

Zero-Hours Contracts

• Whether workers who have established regular hours have been offered guaranteed contracts
• The 12-week reference period has been running since the Employment Rights Act passed — the FWA will check from day one of launch

Other Employment Rights

• Paternity and parental leave records
• Whistleblower policy documentation
• Collective redundancy records (protective award now 180 days)

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Which Sectors Are Being Targeted First?

The FWA has indicated priority sectors for its first wave of proactive inspections. These align with the sectors where HMRC enforcement found the most violations:

Hospitality — highest concentration of zero-hours workers, NLW underpayment, tip distribution issues. Expect early sector sweeps.

Social Care — highest number of employers on HMRC's named-and-shamed list historically. Oliver McGowan training compliance also sits alongside FWA checks.

Retail — NLW underpayment common among large chains and independent retailers. Shift premium manipulation under the FWA's watch.

Construction — holiday pay under CIS arrangements has been a known enforcement gap. FWA will work alongside HSE in this sector.

Cleaning and Facilities Management — historically high non-compliance with minimum wage, often through contracted structures.

If your business is in any of these sectors and you have not audited your compliance since April 6, that audit is overdue by one day.

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What Records You Need Ready

If an FWA inspector arrives, you should be able to produce within a reasonable time:

Record	Retention Period	Notes
Payroll records	3 years minimum	Show hourly rates, hours worked, deductions
Holiday pay records	6 years (from April 6)	New legal requirement — check you have 2020+ records
SSP records	3 years	Must show day-one payment post-April 6
Employment contracts	Duration of employment + 6 years	Include any sick pay clauses
Zero-hours schedules	12 weeks	For guaranteed contract assessment
Sick leave policies	Current version + amendment dates	Must show update post-April 6

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What Happens During an Inspection?

FWA inspections will typically follow this pattern:

1. Notice or unannounced visit — the FWA can arrive without prior notice for certain inspections
2. Document request — the inspector will request payroll, holiday, and SSP records
3. Worker interviews — the FWA can speak directly to your workers (including off the record)
4. Findings notice — if non-compliance is found, a formal notice is issued
5. Enforcement action — ranging from a compliance notice to civil penalties to criminal referral

Unlike HMRC's previous enforcement, the FWA can pursue multiple violations from a single inspection — so a wage underpayment visit that reveals an SSP issue and a holiday pay gap becomes three enforcement actions.

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Penalties — What the FWA Can Do

The FWA inherits and extends the penalty framework from HMRC's minimum wage enforcement:

• National Living Wage underpayment: 200% of underpayment per worker. Maximum £20,000 per worker. Naming and shaming on GOV.UK.
• SSP non-compliance: penalty notice, back-payment order
• Holiday records failure: up to £5,000 fine per worker for failure to produce records
• Zero-hours obligations: unlimited employment tribunal risk where rights are denied

There is no guaranteed first-offence leniency. The FWA was created precisely because the old system had too many soft outcomes.

ComplianceAlert monitors FWA enforcement updates and alerts you when your sector is targeted. Start your free 7-day trial: compliancealert.co.uk

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7 Things to Have in Order Today

1. Check your NLW rate is £12.71/hour — not £12.21, which was widely misquoted before April 1
2. Update your sick leave policy — remove all references to the 3-day waiting period
3. Confirm SSP is triggering from day one in your payroll software
4. Pull 6 years of holiday records — go back to April 2020 and make sure they're accessible
5. Check zero-hours workers who've worked regular patterns — the 12-week clock has been running
6. Audit your holiday pay calculation method — it must include regular overtime and commission
7. Run your free Compliance Score — 20 questions, instant results: compliancealert.co.uk/compliance-score

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FAQs

Can the FWA inspect any business, or only large employers?

Any business that employs workers. The FWA's stated focus is on sectors with high rates of low pay — which disproportionately means SMBs, not large corporates.

Does the FWA replace HMRC minimum wage enforcement?

The FWA takes on responsibility for minimum wage enforcement alongside its new SSP and holiday pay powers. HMRC still has a role in the broader tax and payroll space.

What if I've been paying SSP correctly but my policy still says 3 days?

Update the policy immediately. A written policy referencing the old rules is evidence of non-compliance even if you've been paying correctly in practice. The FWA will treat the document as the primary indicator of intent.

How quickly after launch will the FWA start issuing penalties?

The FWA has said it will begin proactive inspections immediately. Early enforcement actions are expected in May/June 2026 following the first inspection wave.

Can the FWA talk to my workers without me present?

Yes. The FWA has powers to interview workers directly, including anonymously, as part of an investigation.

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Summary

The Fair Work Agency is live. It doesn't need a complaint to visit you. It checks wages, SSP, holiday records, and zero-hours compliance in a single visit.

The sectors at highest risk are hospitality, social care, retail, and construction. If you're in any of them and haven't audited your compliance since Sunday's employment law changes, do it today.

ComplianceAlert tracks FWA enforcement actions and regulatory changes in real time — so you know what's coming before it arrives at your door.

Start your free 7-day trial — no credit card required →

Not sure if your business is prepared? Take our free Compliance Score quiz: compliancealert.co.uk/compliance-score

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