Countdown on for introduction of new employment rights enforcement agency

The clock is ticking for businesses to prepare for the launch of the Fair Work Agency (FWA) in April 2026. Employers who fail to comply with the employment rights enforced by the FWA could face significant consequences, including financial penalties.

“The creation of the FWA marks a step change in the Government’s attitude towards employment rights and shows they will take a proactive approach to enforcing them,” H-J Dobbie, Head of HR Consultancy, said.

“Many of the areas the FWA will enforce when it launches in April – Statutory Sick Pay, statutory holiday entitlement, and agency worker protections for example – are areas employers should already be complying with, but if they don’t, the consequences of not doing so will become more serious from the spring of next year.”

What powers will the FWA have?

The FWA will have extensive authority, including the ability to:

• Enforce employer failure to pay payments to workers that include holiday and Statutory Sick Pay (SSP).
• Issue notices of underpayment to employers if employees haven't received these payments, which can go back up to six years and must be paid within 28 days of being issued.
• Investigate employers it believes aren’t complying with employment law and under this will be able to enter a business’ premises, interview its staff and check documents, computers and equipment.

Julie Gunnell, Associate Director of Payroll Growth, said: “The Fair Work Agency will have the authority to impose financial penalties, publicly identify employers who fail to comply, and represent workers in Employment Tribunal proceedings.

“Its introduction signals a major shift in how employment rights are enforced, and businesses should begin now to review their processes, including payroll processes around accuracy and compliance, to ensure readiness for its launch in April 2026.

“Preparing now will help avoid penalties and reputational risk when the Agency launches in April 2026.”

Key employment rights enforced from 1 April 2026

• Statutory Sick Pay (SSP)
• National Minimum Wage (NMW) including entitlement to the NMW and record-keeping requirements
• Unlawful deductions from pay
• Statutory holiday entitlement and pay
• Agency worker protections
• Modern slavery, human trafficking, and forced labour
• Zero hour & low guaranteed hour contracts and the right to request more stable hours
• Gangmasters licencing
• Obligations to pay sums ordered by an Employment Tribunal or a conciliation agreement.
• A new obligation to keep records demonstrating compliance with statutory holiday entitlement for six years.

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