The Fair Work Agency (FWA) launches around 6–7 April 2026. Created under the Employment Rights Act 2025, it consolidates three previously separate enforcement bodies into a single authority with a broader remit — and more direct powers — than any of its predecessors. For umbrella companies, recruitment agencies, and payroll providers, the enforcement landscape has materially shifted.
Three Bodies, One Authority
The FWA merges the Employment Agency Standards Inspectorate (EAS), the Gangmasters and Labour Abuse Authority (GLAA), and HMRC’s National Living and Minimum Wage enforcement team. (CIPD; Addleshaw Goddard; Farrer & Co)
The consolidation matters because it creates joined-up oversight of the temporary labour market under a single roof — replacing fragmented enforcement with a coordinated authority that can draw on all three bodies’ intelligence and powers simultaneously.
What the FWA Enforces
The FWA’s enforcement remit covers:
**National Minimum Wage and National Living Wage** — inherited from HMRC NLW enforcement
**Statutory Sick Pay** — a new enforcement power from April 2026
**Employment agency conduct rules** — inherited from EAS
**GLAA licensing** — responsibility for gangmaster licensing continues
**Labour exploitation**
Holiday pay — for the first time, statutory holiday pay entitlements are subject to state enforcement (CIPD; Addleshaw Goddard)
The holiday pay mandate is new and significant. Umbrella companies and payroll operators should treat this as a compliance priority, not a future consideration.
Enforcement Powers
The FWA can investigate without a worker complaint — it does not need to wait for a grievance to trigger an inquiry. It can require repayment of underpaid amounts going back six years. Penalties run to up to 200% of the underpaid sum, reduced to 100% for early repayment. (CIPD; Addleshaw Goddard)
For businesses with any exposure on historical holiday pay or NMW calculations, the six-year look-back window means the past is very much in scope.
Implications for Umbrella Companies
Umbrella companies are recognised and regulated as employment businesses for FWA enforcement purposes. Formal oversight of umbrella companies transfers to the FWA from 2027 — a regulatory milestone that gives the sector just under a year to ensure its compliance records are in order. (FCSA.org.uk; Farrer & Co)
FCSA has published guidance specifically for umbrella operators: *Holiday Pay and the Fair Work Agency: Key Compliance Points for Umbrella Companies*. This is recommended reading for compliance and payroll teams ahead of the FWA’s launch. (FCSA.org.uk)
The Time to Build Records Is Now
The FWA’s formal umbrella oversight begins in 2027, but its enforcement powers are live from April 2026. Businesses waiting until regulatory oversight formally arrives before addressing compliance gaps are taking an unnecessary risk. A centralised, auditable record of payroll compliance — covering holiday pay calculations, NMW adherence, and SSP administration — is the foundation any business will need when the FWA comes to call.
[Access Compliance Audit Resources on Diligence Hub →]
────────────────────────────────────────────────────────────
