The Fair Work Agency launches: what employers need to know

A significant shift in UK labour market enforcement took place in April 2026 with the launch of the Fair Work Agency (FWA), a new single body responsible for enforcing key workplace rights.

Keystone’s Employment Partner Marie van der Zyl OBE wrote in November 2025 about the proposed FWA’s plan to centralise enforcement of employment rights, increase scrutiny, investigatory powers and penalties, and require employers to adopt proactive compliance. Read her Keynote here.

In this Keynote, Marie discusses the first report and findings of the FWA and how employers can best prepare for FWA audits and inspections.

What are the aims of the FWA?

The FWA formally came into operation on 7 April 2026, marking the transition from a fragmented enforcement landscape to a unified model under one regulator. It was established under the Employment Rights Act 2025 and sits within the Department for Business and Trade as an executive agency. Its purpose is to modernise and strengthen the way employment rights are upheld in the UK by:

• Simplifying enforcement by bringing together responsibilities previously spread across multiple bodies, including minimum wage enforcement, agency worker regulation, and labour exploitation oversight.
• Providing a single point of contact for workers and employers navigating rights and compliance issues.
• Improving compliance and deterrence, with enhanced and consolidated investigatory and enforcement powers, the ability to impose penalties, and a more proactive and data-led inspection model, with an increased emphasis on both compliance support and enforcement action.
• Protecting workers and supporting fair competition, ensuring that businesses which comply with the law are not undercut by those that do not.

In practical terms, the FWA does not introduce new employment rights but significantly changes how existing rights are enforced, with a more coordinated and visible regulatory approach. While the FWA is now operational, its full remit will be phased in over time, with 2026–2027 representing a transitional period as enforcement powers and priorities continue to develop.

The “Working Lives” report: key findings

Shortly after its launch, the FWA published an independent report on 11 May 2026, “Working Lives: the scale and nature of labour market non-compliance and other work-based harms in the UK”, based on research commissioned by the former Office of the Director of Labour Market Enforcement (DLME) and led by University College London (UCL). The report examines the extent of non-compliance and harmful working practices across the UK labour market and provides a detailed picture of the scale of the challenge facing the new regulator. Findings include:

• Widespread breaches of core employment rights: Breaches of fundamental workplace entitlements are far from rare. Over the two years prior to the research, 14% of workers (around 5.4–5.8 million people) experienced at least one breach of core employment rights (pay-related entitlements, access to key employment information, or protections for agency workers). In addition, 70% of workers (around 26.6–28.7 million) reported at least one of eight main work-related issues, including legal violations and other harmful practices. This points to systemic compliance gaps rather than isolated wrongdoing.

• A broader culture of workplace harm: Beyond strict legal breaches, the report highlights a much wider pattern of problematic workplace experiences. A substantial majority of workers reported experiencing at least one form of detriment linked to work, ranging from unpaid additional hours and pay deductions through to difficulties taking leave, as well as bullying, harassment, physical harm, or adverse impacts on mental wellbeing. These findings show that harmful workplace practices, whether technically unlawful or not, remain common and materially affect employees’ working lives.

• Disproportionate impact on vulnerable workers: Precarious workers (defined by low income, non-traditional work, or minority background in small workplaces) are at increased risk of certain breaches (e.g. NMW breaches, unfair deductions, not receiving payslips).

• Highlighting systemic rather than isolated non-compliance: Non-compliance cannot be characterised as limited to a small minority of rogue employers. The scale and prevalence of issues identified point towards more widespread compliance gaps across the labour market, not always driven by deliberate misconduct but nonetheless resulting in breaches of legal obligations.

• Worker experiences and responses: Many workers tolerate issues, seek advice, complain internally, or leave jobs, but very few escalate to formal complaints or state enforcement bodies. Management response is critical in shaping worker outcomes.
• Trade unions and representation: While attitudes toward trade unions are generally positive, membership and workplace coverage remain low, especially among precarious workers. Barriers include cost, perceived relevance, and lack of awareness.
• Recommendations for the new regulator: The report calls for a stronger and more visible role for the FWA. In particular, it highlights the need for: greater awareness of the FWA’s role and powers, to encourage reporting and engagement; more proactive investigations and enforcement activity, rather than reliance on complaints; and improved communication of workers’ rights and reporting mechanisms, so that individuals understand how to raise concerns. These recommendations align with the FWA’s stated ambition to move towards a more data-led and interventionist enforcement model.

Why this matters for employers

The FWA’s first major report suggests that non-compliance is both widespread and often embedded in everyday practices. For employers, the key takeaway is not the creation of new rights, but the early stages of what is expected to become a step change in enforcement intensity and visibility. The data suggests that even unintentional non-compliance is common – and now more likely to be identified and acted upon.

Employers should expect:

• Increased scrutiny of pay practices and record-keeping.
• A greater likelihood of proactive audits or inspections.
• More coordinated enforcement across multiple areas of workforce compliance.

What employers should do

Employers should:

• Audit compliance with core rights – particularly pay, contracts, and agency arrangements.
• Review systems and records to ensure they withstand scrutiny.
• Train HR and payroll teams on evolving enforcement expectations.
• Monitor developments as the FWA’s remit expands.

By moving from reactive compliance to proactive risk management, employers can put themselves in the strongest position to withstand scrutiny – before the regulator comes knocking.

If you have any questions or concerns about the Fair Work Agency and how your organisation can prepare, please contact Employment Partner Marie van der Zyl OBE.