The Fair Work Agency: What Hospitality Operators Need to Know

Four labour-market functions were folded into one on 7 April 2026. The Fair Work Agency, an executive agency of the Department for Business and Trade, absorbed the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority (GLAA), HMRC's national minimum wage team, and the labour-market enforcement strategy function.

The consolidation changed enforcement. It didn't change what employers owe. Legal responsibility for national minimum wage (NMW) enforcement moved to the FWA, though HMRC continues to deliver investigations under contract until the team fully transfers in April 2027. The powers have been live since 7 April, with no grace period.

By 4 July 2026 the FWA had yet to announce an inspection, an underpayment notice, a naming round, a prosecution, or a named employer. The government's Strategic Steer puts the 2026/27 budget at £60.1 million, against £47.4 million for the predecessor bodies.

The live remit is narrow

The FWA has covered three areas since day one: national minimum wage, employment agency standards, and gangmasters licensing. NMW complaints, proactive investigations, notices of underpayment, and criminal prosecution for wilful non-compliance all continue. The FWA also regulates employment agencies and employment businesses. Enforcement liability under that regime sits with the agency or employment business; hirers can be required to provide records or information during an investigation, but they are not the enforcement target. The GLAA's licensing and enforcement functions also transferred, including certain functions under the Modern Slavery Act 2015.

Several familiar hospitality risks are enforced elsewhere:

• Right to work stays with the Home Office, through Immigration Enforcement visits and civil penalties.
• Tips disputes are worker-led tribunal claims.
• Sexual harassment prevention belongs to the Equality and Human Rights Commission (EHRC) and the tribunals, with the "all reasonable steps" standard arriving in October 2026.
• Rest periods and breaks mainly go to tribunals; the Health and Safety Executive (HSE) holds some Working Time Regulations responsibilities.
• Holiday pay and statutory sick pay are for later FWA phases, with no government date fixed.

One wage complaint opens more than wages

Officers carry powers under Part 5 of the Employment Rights Act 2025. They can enter premises where work takes place without a warrant; a warrant is required only for a dwelling. Once inside, they can require documents by written notice, access computer systems on the premises, including rota software and payroll platforms, and seize documents where necessary.

An NMW investigation can uncover breaches outside the FWA's remit because they appear in the same records. The FWA itself cannot enforce breaches involving working time, written statements of terms, or tipping records. Another regulator may act on the evidence, or the breach may surface in a later tribunal claim.

The minimum wage is where hospitality keeps failing: accommodation offset miscalculations, uniform costs, unpaid training time, and clock rounding are recurring features of HMRC's NMW caseload on hospitality.

For the first-contact and inspection-process detail, see our separate FWA inspection briefing.

The price of underpayment

The FWA enforcement statement retains the existing NMW penalty: 200% of arrears, capped at £20,000 per worker. If the employer pays the arrears and half of the penalty within 14 days, the remaining half is waived.

Arrears depend on the hourly shortfall, how many hours were underpaid, how long it continued, and how many workers were affected. Underpayments are recalculated using today's minimum wage, which can increase the amount owed. The worked example below uses a £1 shortfall for five hours a week over 52 weeks for ten workers. A notice can cover underpayments that fell due in the six years before it was issued.

Obstructing an officer is a criminal offence. That includes refusing entry, withholding documents, and providing false information. The Secretary of State can ask a court to impose a Labour Market Enforcement Order requiring specific corrective steps. Breaching an order is a criminal offence. The FWA's power to bring employment tribunal proceedings for individual workers is not yet in force.

Still to come

The government's implementation timeline sets out the next stages of employment rights reform. October 2026 brings the harassment "all reasonable steps" duty, along with a duty to consult staff on tips and review the tipping policy every three years. January 2027 brings the six-month unfair-dismissal qualifying period and fire-and-rehire restrictions. April 2027 is the scheduled full transfer of HMRC's NMW team into the FWA. The zero-hours and guaranteed-hours package follows later in 2027. Holiday-pay and statutory sick pay enforcement remain later-phase FWA work without fixed government dates.

Records an officer can require

Items marked with an asterisk fall within the FWA's direct day-one enforcement remit: NMW, agency standards, or gangmasters licensing. The rest can still be required during an inspection because they live in the same employment records.

• Payroll records demonstrating NMW compliance, including accommodation offset calculations where applicable *
• Time records covering the hours actually worked *
• Employment contracts or written statements of terms for every worker (the s.1 written-statement duty is tribunal-enforced, not within the FWA's day-one remit; officers can still require them during an inspection)
• Agency worker confirmations: written evidence from every agency covering NMW and agency standards compliance
• Right-to-work check records for every current worker (Home Office enforcement, not FWA)
• Tipping policy and allocation records (a tribunal matter; the three-year retention rule is statutory)
• Sexual harassment prevention evidence: risk assessment, policy, training records (the EHRC's territory)