⚠️ The Fair Work Agency Is Coming – Are You Prepared?

HR Matters
Sep 8
3 min read

A new era of employment law enforcement under the Employment Rights Bill

What Is the Fair Work Agency (FWA)?

The Employment Rights Bill, currently moving through Parliament, introduces the Fair Work Agency (FWA) — a central regulator with the power to enforce employment law across the UK.

This is a major shift. Until now, employment rights enforcement has been fragmented:

HMRC oversaw the National Minimum Wage.
ACAS managed settlement agreements (COT3).
The Gangmasters and Labour Abuse Authority (GLAA) policed agency work and licensing.
Employment Tribunals handled breaches after employees filed claims.

The FWA will bring all these powers together in one agency — and crucially, it will take proactive enforcement action rather than waiting for employees to complain.

Why This Matters to Business Owners

Think of the Health and Safety Executive (HSE). Every UK employer knows HSE can inspect, issue notices, and prosecute if workplace safety isn’t up to standard.

The FWA is designed to be the HSE for HR and employment law.That means:

Inspections without notice.
Document audits (contracts, policies, records).
Underpayment orders (holiday pay, sick pay, minimum wage).
Tribunal claims on behalf of workers — even if staff don’t complain.

In short: if your HR paperwork is weak, generic, or outdated, you’re exposed.

Risks and Penalties

The FWA will have teeth. Its powers include:

Fines of up to 200% of any underpayment, capped at £20,000 per employee.
Cost recovery for enforcement action.
Criminal offences for obstructing inspectors.
Authority to seize documents and demand access to payroll/HR records.

This isn’t theory — it’s written into the Employment Rights Bill enforcement clauses.

Real-World Scenarios

Scenario 1: Outdated Contracts - An SME has contracts written before the April 2024 flexible working reforms. Employees technically have the right to request flexible working from day one, but the contracts say otherwise. An inspector flags this as non-compliance → advisory or fail.
Scenario 2: Missing Sick Pay Records - A care provider hasn’t properly documented statutory sick pay (SSP). Inspectors issue an underpayment notice requiring repayment of missed SSP within 28 days, plus a penalty.
Scenario 3: Holiday Pay Miscalculation - A logistics firm has been calculating holiday pay on basic pay only, not average pay including overtime. Inspectors calculate arrears across the workforce. The financial hit = tens of thousands plus penalties.

Who’s Most at Risk?

Government discussions suggest inspectors will target high-risk sectors first:

Care & health – due to widespread underpayment and complex shift patterns.
Hospitality & leisure – variable hours, zero-hours contracts, and frequent pay breaches.
Logistics & transport – holiday pay miscalculations and agency labour risks.
Construction & seasonal industries – reliance on agency staff and casual labour.

If your business is in these sectors, you are firmly on the FWA’s radar.

How to Prepare Now

Here’s a 5-step checklist to prepare for a Fair Work Agency inspection:

Audit contracts – Ensure all contracts reflect current law (flexible working, neonatal leave, sick pay, minimum wage, etc.).
Update handbooks – Policies must cover grievance, disciplinary, equality, absence, parental leave, and more.
Review pay practices – Double-check holiday pay, sick pay, overtime, and NMW compliance.
Keep records – Accurate records of hours worked, pay calculations, and absence are critical.
Run an HR MOT – Treat HR like a car, test it before the inspector does.

How HR Matters Can Help

At HR Matters, we’ve built our HR MOT service specifically to get businesses ready for enforcement.

We’ll stress-test your contracts and policies against the Employment Rights Bill and current law, giving you a clear rating:

✅ Pass – compliant, minimal risk.
⚠️ Advisory – issues to fix before inspection.
❌ Fail – serious gaps needing urgent action.

It’s free, fast, and confidential — giving you peace of mind before inspectors arrive.

Book Your HR MOT Today

The Fair Work Agency is coming. Fines of up to £20,000 per employee are real. Don’t wait for an inspector to knock on your door.

👉 Book your FREE HR MOT today:📞 01733 667030🌐 www.hr-m.co.uk✉️ legal-team@hr-m.co.uk