What employers need to know before the April 2026 Fair Work Agency changes

One of the less publicised announcements in the 2025 Budget was the creation of a new Fair Work Agency. It is set to launch in April 2026 and forms part of the Government’s wider ‘make work pay’ agenda. The agenda aims to simplify enforcement, strengthen worker protections and ensure employers meet their legal obligations.

For employers, the introduction of the Fair Work Agency marks the most significant shift in national minimum wage enforcement in more than a decade. By bringing together three existing bodies into a single regulator, the Government is seeking to create a more joined‑up approach to workplace compliance and one that will come with tougher penalties, more investigations and fewer opportunities to correct mistakes.

With NMW legislation already complex and enforcement activity rising, it is important for employers to understand what will change, what risks they may face and how they can prepare ahead of April 2026.

Who is the Fair Work Agency?

The Fair Work Agency (FWA) is a new single enforcement body for employment rights in the UK. Launching on 7 April 2026, it will bring together the functions of:

• HMRC’s National Minimum Wage enforcement team
• The Employment Agency Standards Inspectorate (EASI)
• The Gangmasters and Labour Abuse Authority (GLAA)

Its role is to provide one central place for enforcing rights. This includes national minimum wage, holiday pay, statutory sick pay and protections for agency workers. The agency will be responsible for investigating breaches, issuing penalties and ensuring any underpayments are rectified with stronger powers and a broader remit than the current system.

What’s changing?

• Historically, HMRC have been responsible for NMW enforcement. However from April 2026, the Fair Work Agency will assume this responsibility
• The Fair Work Agency will have authority to investigate workplaces and issue penalties for underpayments. It can also take legal action to enforce rights regarding minimum wage, holiday pay and sick pay
• The Fair Work Agency is envisioned as a single, centralised enforcement body for workplace rights. It is hoped will lead to a less fragmented approach
• The Government hopes this will mean that fewer breaches of employment rights will slip through the net. In particular that lower paid workers will be less likely to miss out on receiving a fair wage
• It has been suggested that the Fair Work Agency will expand in scope in the future, covering employment rights enforcement in general, supporting both employees and employers to understand the ever-expanding requirements in this area

Why does the Fair Work Agency matter?

• The Fair Work Agency will have powers for tougher enforcement including issuing penalties of up to 200% of any wage shortfall, entering business premises to investigate and recovering enforcement costs from employers
• Common areas of especially high NMW risk are where employers offer salary sacrifice arrangements, where employees work unpaid hours (including overtime) and make deductions from wages for accommodation or other costs

Removal of the support stage

Alongside these changes, HMRC are also reducing the opportunities for employers to put right NMW mistakes. Previously, HMRC provided employers with a ‘support stage’ in which they would receive help to understand any failings and rectify them without the application of harsh penalties. This stage included a call with HMRC to discuss the complexities of the legislation and help identify any areas of failure.

By removing this window, businesses are much more likely to face penalties and be named and shamed by HMRC. Once HMRC make contact over this issue, it may be too late to take any remedial action. Taking proactive steps is therefore highly recommended.

How employers can prepare for the Fair Work Agency

Where your company could be impacted, and this could include any employers, we encourage getting specialist advice. This is where our team can help. You could engage us in undertaking a broad ‘health-check’ into your application of NMW legislation, where we can highlight areas of risk ahead of the April 2026 changes. Alternatively, we could pinpoint our checks to specific areas of concern you may have.

If you would like to contact us regarding these matters, please reach out on the below details: