A new, tough stance against employment law abuse started in April 2026.

The Fair Work Agency has been created to clamp down on employers’ abusive practices… hard. You won’t know they’re looking into your business until the day they arrive. This is serious.

What is the Fair Work Agency?

This is a single body with the authority to investigate issues and undertake action against unlawful employers and business owners. It combines existing enforcement powers regarding:

• Agency workers’ rights
• Vulnerable workers’ rights
• Statutory rights enforcement

The Fair Work Agency protects workers by:

• enforcing the National Minimum Wage.
• regulating employment agencies and businesses.
• licensing labour suppliers to the agriculture and food sectors.
• acting against employers who commit serious labour exploitation or abuse.
• taking steps to penalise employers who do not pay awards given to a worker in an employment tribunal or Acas settlement.

It’s a single enforcement agency with a lot of power. Crucially, it simplifies the processes for employees and workers who need support. It also provides guidance to help employers meet their legal responsibilities. (Read the enforcement policy statement.)

What power does the Fair Work Agency have?

Enforcement powers include the authority to inspect workplaces and demand records without an appointment. You won’t know they’re coming. Think “on the spot” checks. If they knock on your door, you are required to produce relevant documents to prove you comply with employment law. If you fail to comply with employment law requirements, your business could be publicly named and shamed. You could also be charged for the cost of the investigation.

This in itself is frightening many employers. And there’s more …

• When enforcement officers find that workers have been underpaid, the Fair Work Agency can issue Notices of Underpayment requiring payment of the amount owed to employees and a penalty to the government. It can pursue up to six years of underpayments.
• Civil proceedings in employment tribunals can be brought, with workers receiving assistance, including legal advice.
• When labour market criminal offences are found, employers must correct their processes. They receive a compulsory Labour Market Enforcement Order which, if breached, can result in fines or imprisonment.

The Fair Work Agency has teeth. It goes beyond investigating and inspecting. If it finds non-compliance, it has the power to penalise and prosecute. For example, there is a maximum penalty for underpayment of national minimum wage, statutory sick pay or holiday pay. This is 200% of the amount owed, capped at £20,000 per worker (reduced to 100% if paid within 14 days).

What should employers do?

‘Employers should only be nervous of the Fair Work Agency if they are concerned that their employment processes and records aren’t right,’ says Emma Clack of Heneom HR based in Stevenage and Welwyn, Herts. ‘Being proactive now will reassure business owners and employees that they are fair and compliant.’

The initial actions you can take include:

• Audit your employment system now to ensure you have good-faith compliance.
• Check for strong payroll, contracts and record-keeping processes.
• Keep track of how the Fair Work Agency develops – more powers are expected!

Your first step?

Don’t live in fear of a knock at the door from the Fair Work Agency.

Book an HR audit with Heneom HR. There’s no obligation or judgement involved. We’ll cast an expert eye over your current HR practices and let you know how to get your HR ducks in a row … and feel reassured about any surprise visits.