Fair Work Agency sets enforcement direction and priorities for transitional year
The government and the Fair Work Agency outline how the new enforcement body will operate in 2026–2027, with a focus on compliance, coordination and future expansion of powers.
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Background
The Fair Work Agency (FWA) was formally established on 7 April 2026 as an executive agency of the Department for Business and Trade, bringing together a number of existing labour market enforcement functions.
It assumes responsibility for enforcement previously carried out by the Employment Agency Standards Inspectorate and the Gangmasters and Labour Abuse Authority. Responsibility for national minimum wage enforcement will remain with HMRC until April 2027, and will then be taken over by the FWA.
Alongside its launch, the government published a strategic policy paper setting out expectations for the FWA during its transitional year (2026–2027). At the same time, the FWA issued an enforcement policy statement and a Code of Practice dealing with labour market enforcement undertakings and orders.
Key developments
The government has identified five core priorities for the FWA during its first year.
A central theme is reducing regulatory burdens on compliant employers, including through clearer guidance (working with Acas), better use of digital tools and reducing duplication across enforcement regimes.
There is also a strong emphasis on the use of intelligence and data. The FWA is expected to develop systems to support its future operating model, including preparing for full responsibility for minimum wage enforcement from April 2027 and improving data sharing across functions.
Raising awareness is another key focus. The FWA is expected to create a single, accessible digital “front door” for complaints and to increase transparency by publishing enforcement outcomes and impact data.
The policy paper also positions the FWA as a thought leader, bringing together stakeholders to identify labour market risks and promote best practice.
Finally, the FWA is expected to prepare for an expanded role from 2027 onwards, including enforcement of holiday pay and wider employment rights, supported by a statutory enforcement strategy (due in April 2027).
Alongside this strategic direction, the FWA’s enforcement policy statement provides insight into how it will operate in practice. Enforcement activity will be guided by principles of proportionality, consistency, transparency and targeting. The stated aim is to secure compliance, protect workers and ensure a level playing field for compliant employers.
The accompanying Code of Practice sets out how the FWA will use labour market enforcement undertakings and orders. These tools are intended to secure compliance without immediate recourse to more punitive measures, although the FWA retains the ability to pursue civil or criminal enforcement where appropriate. The Code explains the factors the FWA will consider when seeking an undertaking, how compliance will be monitored and when escalation to a court order may be justified.
Learning points for employers
The creation of the FWA marks a shift towards a more coordinated and visible enforcement landscape. Employers should review their compliance in key risk areas, including pay, agency worker arrangements and working time, in anticipation of expanded enforcement powers from 2027, particularly in relation to national minimum wage and holiday pay.
For more information or advice, please get in touch with Jessica Scott-Dye in our Employment team.
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