The Fair Work Agency has spoken. Is your organisation ready?

The publication of the Fair Work Agency's (FWA) first Delivery Plan for 2026/27 provides an important indication of how labour market enforcement is set to evolve over the coming years.

While the plan highlights the agency's focus on tackling labour exploitation and supporting workers, it also contains a clear message for employers: employment rights and compliance are moving further up the agenda.

For payroll and HR teams already navigating ongoing legislative change, increasing reporting requirements and growing scrutiny from regulators, the FWA's priorities reinforce the importance of getting the fundamentals right. The question is whether organisations are ready.

A new era of labour market enforcement

The Fair Work Agency (FWA) has been established to bring together several existing employment rights enforcement functions into a single body, with the longer-term aim of improving compliance, supporting workers and creating a more consistent approach to enforcement.

Its first Delivery Plan focuses on five key areas:

• Supporting workers to understand and exercise their rights
• Helping employers comply with employment law
• Tackling labour market abuse and exploitation
• Developing digital tools and services
• Preparing for the transfer of National Minimum Wage (NMW) enforcement responsibilities in April 2027

Taken together, these priorities suggest a regulatory environment that is becoming both more proactive and more accessible.

For compliant employers, this should be welcomed. However, it also means organisations should expect greater visibility of employment rights obligations and potentially increased scrutiny where errors occur.

Holiday pay enforcement is already moving up the agenda

The Fair Work Agency's Delivery Plan also needs to be viewed alongside recent developments in holiday pay enforcement.

As explored in our recent article, Holiday pay enforcement: are your payroll processes ready for increased scrutiny?, the Government is currently consulting on how the Fair Work Agency will enforce holiday pay rights. Alongside the planned transfer of NMW enforcement responsibilities in April 2027, this reinforces a clear trend towards greater focus on accurate payments, robust record-keeping and demonstrable compliance.

For employers, this reinforces a broader trend. Employment rights compliance is increasingly focused not only on whether payments are correct, but whether organisations can demonstrate how those payments have been calculated and evidenced. As scrutiny grows, payroll, HR and finance teams will need to work closely together to ensure systems, processes and records remain fit for purpose.

National Minimum Wage compliance remains firmly in focus

Perhaps the most significant development for many employers is the planned transfer of NMW enforcement responsibilities to the Fair Work Agency from April 2027.

National Minimum Wage compliance has long been an area where well-intentioned employers can encounter problems. Payroll errors are not always caused by deliberate wrongdoing. Issues can arise through salary sacrifice arrangements, deductions, working time calculations, uniform costs, accommodation offsets or apprenticeship pay rules.

As enforcement arrangements evolve, employers may wish to use the intervening period to review payroll processes and identify any areas of potential risk.

Digital tools could make compliance easier

The FWA intends to develop tools and services aimed at helping both workers and employers understand and comply with employment rights obligations.

Early indications suggest areas such as payslips and holiday pay may feature prominently. For payroll teams, this could be a positive development.

Employment legislation is often complex, particularly when organisations are managing different worker categories, variable hours arrangements and multiple payroll processes.

Improved digital support could help simplify some of these challenges while making information more accessible. However, greater accessibility may also mean employees are better equipped to identify and challenge potential errors.

Employer support is increasing and so are expectations

One notable feature of the Delivery Plan is its emphasis on helping employers understand and meet their obligations. This reflects a growing recognition that compliance is often improved through education and guidance rather than enforcement alone.

However, whether the focus is NMW compliance, holiday pay, record-keeping or wider employment rights, employers should expect greater visibility of their obligations and increasing expectations around compliance.

Is your organisation prepared?

For many employers, the principles underpinning the agency's approach, including clarity, consistency and worker protection, will be entirely aligned with existing practices. However, the Delivery Plan serves as a useful reminder that employment rights compliance continues to evolve.

Questions employers may wish to consider include:

• Are payroll processes regularly reviewed for compliance risks?
• Is National Minimum Wage compliance tested proactively?
• Are holiday pay calculations robust and well documented?
• Do HR and payroll teams have clear ownership of compliance responsibilities?
• Could current processes withstand greater employee awareness and regulatory scrutiny?

Organisations that address these questions now are likely to be better positioned as the FWA expands its role over the coming years.

Looking beyond compliance

Ultimately, the most successful employers view compliance as more than a box-ticking exercise. Accurate payroll, transparent processes and a strong understanding of employment rights help build trust with employees, reduce business risk and support long-term organisational resilience.

The FWA’s Delivery Plan signals that employment rights enforcement is entering a new phase. The employers that respond proactively now will be better placed to navigate future changes with confidence.

What employers should do now

Employers do not need to wait for future enforcement changes to begin strengthening their compliance position. The Fair Work Agency's Delivery Plan provides a useful opportunity to review existing payroll, HR and employment tax processes and identify any areas that may benefit from improvement.

Practical steps organisations may wish to consider include:

• Reviewing NMW compliance processes and identifying any areas of potential risk.
• Assessing whether payroll calculations, deductions and working time records are accurate, complete and appropriately documented.
• Checking that holiday pay calculations and supporting records can withstand increased scrutiny.
• Ensuring payroll, HR and finance teams have clearly defined responsibilities and effective communication processes.
• Reviewing record-keeping arrangements to ensure information is retained, accessible and supported by a clear audit trail.
• Assessing whether existing systems provide sufficient visibility, automation and reporting capabilities to support compliance requirements.
• Providing refresher training for payroll professionals, HR teams and line managers on key employment rights obligations.
• Considering an independent compliance review to identify potential risks before enforcement expectations increase further.

Organisations that take proactive steps now are likely to be better positioned as the Fair Work Agency expands its role and employment rights enforcement continues to evolve.

We’re here to help

With further employment law reforms, evolving compliance obligations and changes to enforcement arrangements on the horizon, now is a good time to review whether your payroll, HR and employment tax processes remain fit for purpose.

Azets' Payroll, Employment Tax and HR specialists can help identify compliance risks, assess processes and provide practical support to help your organisation stay ahead of regulatory change. Get in touch via the form below to discuss your position.