Employment Law Digest November 2025: Fair Work Agency to be introduced in the Employment Rights Bill
3rd November, 2025
Heather Ramsay
Solicitor | Employment
+44 (0) 330 137 3191
+44 (0) 754 330 9458
The FWA will be a centralised body with wide-ranging powers to uphold workplace rights and will reshape how some workplace rights are policed in the UK. This was one of the Labour government’s key manifesto pledges, driven by the view that the current system of state enforcement is fragmented and inefficient.
What will the Fair Work Agency do?
The policy intention is that it will be a single place where workers and employers can turn for help, improving efficiency by ensuring there is one leadership team to oversee work in line with a unified strategy. The idea is that the Fair Work Agency will support businesses in complying with the law, as well as its enforcement powers, taking a ‘balanced approach’ with better support for the majority of employers who want to comply and tough action against those who do not.
The FWA will serve as a single, unified enforcement body, combining the roles of several existing regulators/enforcement bodies, such as HMRC’s national minimum wage team, the Gangmasters and Labour Abuse Authority, and elements of the Employment Agency Standards Inspectorate.
The FWA will have a wide-ranging remit, including:
- Enforcing minimum wage compliance.
- Monitoring holiday pay, statutory sick pay, and payslip accuracy.
- Tackling modern slavery and labour exploitation.
- Regulate agency work and supply chains.
- Oversee statutory sick pay, holiday pay and contractual transparency (where secondary legislation permits).
- Respond more effectively to complaints from workers and whistleblowers.
Importantly, the FWA will have increased investigatory powers, including the ability to conduct unannounced inspections, issue civil penalties, and publicly name non-compliant employers. Where breaches are found, the FWA will be able to take enforcement action without the need for individual workers themselves to raise a tribunal claim, addressing gaps where vulnerable workers are unable or unwilling to assert their rights.
The government produced factsheet on the FWA states that further details will be provided in due course. It is anticipated that, over time, it will take on enforcement of a wider range of employment rights. Whilst that may be the case, the government has confirmed that equality legislation will remain outside its remit for now. If this position changes, the implications could be significant and it would represent a significant change to the status quo.
When will the Fair Work Agency launch?
As of now, the Employment Rights Bill is progressing through Parliament, with Royal Assent expected later this year. Following the ‘Implementing the Employment Rights Bill: Our roadmap for delivering change’ that was released at the start of July 2025, it is now expected that the Fair Work Agency will become operational in April 2026, following a period of transition and consultation. Employers should expect draft guidance and sector-specific codes of practice to emerge in the interim.
It is likely that there may be some kind of transitional period. For example, transferring NMW enforcement from HMRC to the FWA will take some time, and it may be that HMRC will continue performing that task for a time even after the FWA has been set up. It is likely to be a number of years before it is fully operational.
Key takeaways
The success of the Fair Work Agency will depend heavily on funding, resourcing, and political will. If properly staffed and supported, it could significantly shift the compliance landscape, especially for employers in sectors like logistics, care, hospitality, and construction, where complex labour supply chains, low-paid roles, and past compliance issues make them more exposed to enforcement scrutiny. Businesses may be held accountable for non-compliance further down their labour supply chains, meaning that due diligence will be essential. Now is the time to review employment practices and supply chains, ensuring full transparency and alignment with statutory obligations and avoiding scrutiny and reputational damage down the line. Employers may face:
- Closer scrutiny of working arrangements
- Liability for non-compliance within their supply chains
- Higher reputational risk from public naming
- Greater enforcement activity, even without worker complaints
The FWA marks a shift toward a more compliance-driven and enforcement-heavy landscape. While the core legal obligations remain the same, how they are monitored and enforced is about to change. Unlike current enforcement models, which are often complaint-driven and inconsistent, the FWA will have the power to investigate employers pre-emptively and across multiple fronts simultaneously and penalties and enforcement notices are expected to be used more frequently and consistently than under the current system. Areas that have historically flown under the radar, such as holiday pay for irregular hours workers or deductions made by umbrella companies, are likely to receive greater enforcement attention.
Employers should:
- Review employment practices and pay compliance
- Conduct due diligence on labour providers and agency arrangements
- Ensure documentation, contracts, and internal processes are up to date
- Consider internal audits to identify risks before regulators do
At Ward Hadaway we have extensive experience supporting employers with workplace compliance, enforcement risk, and navigating changes in employment law. We regularly advise on affected areas such as minimum wage obligations, holiday pay entitlements, and agency worker arrangements – areas which are likely to come under increased scrutiny with the introduction of the FWA.
If you have any questions about the FWA or would like advice on how to prepare for the upcoming changes, please get in touch with one of our expert Employment Lawyers.