What is the Fair Work Agency? What UK Businesses Need to Know Before April 7

Q: Who Does It Target First?

The government has been explicit: hospitality is the primary enforcement focus for the Fair Work Agency's first year.

Published: 28 March 2026
Author: ComplianceAlert
Category: Employment Law, UK Compliance
Target keywords: Fair Work Agency UK, Fair Work Agency NMW enforcement, what is the Fair Work Agency, Fair Work Agency hospitality
Meta description: The Fair Work Agency launches April 7, 2026. It replaces HMRC's NMW enforcement team with broader powers over wages, sick pay and holiday pay — and hospitality is its first target. Here's everything UK businesses need to know.
Internal links: /hospitality, /features, /pricing
Word count: ~1,350

On April 7, 2026 — nine days from now — a new government enforcement body will formally launch in the UK.

Most business owners have never heard of it.

The Fair Work Agency is the most significant change to employment law enforcement in a generation. It has more resources than its predecessor, broader powers, and a very clear list of which sectors it plans to target first.

Hospitality is at the top of that list.

If you employ anyone in the UK — particularly in a restaurant, pub, hotel, café or takeaway — here's what you need to know before April 7.

What Is the Fair Work Agency?

The Fair Work Agency (FWA) is a new standalone government body created under the Employment Rights Act 2025. It formally launches on April 7, 2026.

Before now, enforcement of employment rights was split across multiple agencies:

HMRC enforced National Minimum Wage (NMW) and National Living Wage (NLW) underpayments
HMRC also (in theory) handled Statutory Sick Pay (SSP) disputes — though enforcement was notoriously weak
Holiday pay underpayments were left almost entirely to individual workers to pursue through tribunals

The Fair Work Agency consolidates all of this. From April 7, the FWA will investigate and enforce:

National Minimum Wage and National Living Wage compliance
Statutory Sick Pay obligations
Holiday pay entitlements
Agency worker rights under the Agency Workers Regulations

This isn't just a rebrand. It's a meaningful structural change. The FWA has its own budget, its own inspectorate, and a mandate from the government to actively pursue non-compliance — not just respond to complaints.

What Can the Fair Work Agency Do?

The FWA inherits HMRC's existing NMW enforcement powers and adds to them. That means it can:

Investigate your business proactively. Unlike the old complaint-led model, the FWA can initiate investigations based on sector intelligence — meaning it can target industries it knows are problematic, without waiting for a worker to file a report.

Issue notices of underpayment. If it finds you've underpaid workers, it will order you to repay the arrears — plus interest.

Levy civil penalties. Penalties of up to 200% of the underpayment (currently capped at £20,000 per worker) can be applied in serious cases.

Name and shame. HMRC published quarterly lists of employers who underpaid NMW. The FWA continues this practice. Being named is reputationally damaging and often picked up by local and trade press.

Pursue criminal prosecution in the most serious cases — wilful non-compliance, obstruction of investigators, or repeat offenders.

What's new is the scope. Before, a business with perfect NMW compliance but a patchy SSP policy was largely safe from enforcement. From April 7, the FWA can look at your whole employment compliance picture in a single investigation.

Who Does It Target First?

The government has been explicit: hospitality is the primary enforcement focus for the Fair Work Agency's first year.

This isn't arbitrary. HMRC's NMW enforcement data has consistently shown that the hospitality sector has the highest rate of wage underpayment in the UK economy. The reasons are structural:

Complex shift patterns make it easy to accidentally calculate hours incorrectly
Tips, tronc and service charge arrangements create payroll complexity that can inadvertently reduce effective hourly rates below NMW
High staff turnover means payroll admin is under constant pressure
Part-time and zero-hours contracts require careful monitoring to ensure NLW compliance across variable hours

The FWA exists partly because HMRC's dual role — revenue collection and employment enforcement — meant enforcement was perpetually under-resourced. The FWA has a single mandate. Employment rights. That's it.

Retail and construction are also listed as priority sectors. But the explicit mention of hospitality — and the timing alongside the NLW increase — should be a clear signal to any operator.

What Happens in the Next 10 Days

The FWA doesn't launch in a vacuum. It arrives alongside several other significant employment law changes, all hitting in the space of 10 days:

April 1: The National Living Wage rises to £12.71 per hour (up from £12.21). Every worker aged 21 and over must be paid at least this rate for every hour worked from Monday. On a team of 20 at 40 hours per week, that's an additional £20,800 per year in labour costs.

April 6: Statutory Sick Pay becomes a day-one right for all workers — meaning the old three-day waiting period is abolished. Every sick day qualifies from the first absence, regardless of earnings or length of service. Holiday pay records also become mandatory from April 6.

April 7: The Fair Work Agency formally launches and begins operations.

If your payroll was compliant last week but you haven't updated it for the £12.71 rate, you're already non-compliant as of Monday. If your sickness policy still references the three-day wait, it's wrong from Sunday.

The FWA's first investigations will almost certainly focus on NLW compliance — because they have the best data on it, and because the April 1 uplift gives them a clean threshold to audit against.

What You Should Do Before April 7

You don't need to panic. But you do need to act. Here's a practical checklist:

1. Confirm your payroll reflects £12.71/hr from April 1 Check every pay grade, every worker aged 21+. Check tronc and service charge arrangements — if these reduce effective hourly rates below NMW, you have a compliance problem.

2. Update your SSP policy Remove any reference to a three-day waiting period. Day-one SSP applies to all workers from April 6, regardless of contract type or earnings level. Update your employee handbook, payroll instructions, and any template sick leave letters.

3. Ensure holiday pay records are in order Holiday pay calculation changed in April 2024. From April 6, maintaining proper holiday pay records becomes a formal obligation rather than best practice. If your records are inconsistent or incomplete, now is the time to regularise them.

4. Know who to call if you receive an FWA notice The FWA will issue formal notices rather than informal HMRC correspondence. If you receive a notice after April 7, you typically have 28 days to respond. Having a good employment lawyer or HR adviser on hand is sensible — especially as the agency beds in and establishes its processes.

5. Document everything The FWA will look at records. If you can demonstrate documented, good-faith compliance efforts — updated policies, payroll records, training notes — that matters in any investigation. Poor documentation is itself a risk factor.

The Information Gap Is Your Biggest Risk

The most dangerous position for a hospitality business right now isn't being non-compliant. It's not knowing that compliance requirements just changed.

The Fair Work Agency isn't a theoretical risk. It launches in 9 days. It has a budget. It has inspectors. It has hospitality marked as priority sector number one.

And yet, in conversations with hospitality operators across the UK this month, the most common response to "have you heard of the Fair Work Agency?" is a blank look.

That's the problem ComplianceAlert was built to solve.

How ComplianceAlert Helps

ComplianceAlert monitors UK regulatory changes across employment law, health and safety, food standards, licensing, and more — and sends you a plain-English alert whenever something changes that affects your business.

When the Fair Work Agency publishes its first enforcement guidance in April, you'll be notified. When they announce enforcement campaigns against specific sectors, you'll know before they arrive. When HMRC, ACAS, or the FSA publish updates relevant to hospitality operators, you'll get a clear, jargon-free summary.

You shouldn't need a compliance team or a £200/hour solicitor to stay on the right side of UK employment law. That's what £19 a month is for.

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Key Dates: April 2026 Compliance Calendar for Hospitality

Date	What Changes
1 April	NLW rises to £12.71/hr. Business rates RHL relief abolished. EPR packaging labels mandatory.
6 April	SSP becomes a day-one right. Holiday pay records mandatory. Paternity leave: day-one right.
7 April	Fair Work Agency formally launches. Takes over NMW, SSP and holiday pay enforcement.