The Fair Work Agency: What Hospitality Operators Need to Know

The Fair Work Agency launches on 7 April 2026. It brings together HMRC's national minimum wage team, the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority, and the Director of Labour Market Enforcement into a single executive agency of the Department for Business and Trade.

The employer obligations haven't changed. What changed is that one body now enforces NMW, agency standards, and gangmasters licensing together, with a single director overseeing labour market enforcement strategy.

What the FWA enforces from day one

National minimum wage. All NMW enforcement previously handled by HMRC transfers to the FWA. Complaints, proactive investigations, notices of underpayment, and criminal prosecution for wilful non-compliance. Hospitality has specific NMW traps that HMRC actively pursued for years: accommodation offset miscalculations, uniform costs pulling pay below the floor, unpaid training time, and clock-rounding that shaves minutes off shifts.

Employment agency standards. The FWA takes over regulation of employment agencies and employment businesses. Both the agency and the end-hirer are within scope of agency standards enforcement.

Gangmasters and labour abuse. The GLAA's licensing and enforcement functions transfer to the FWA, including certain functions under the Modern Slavery Act 2015.

What the FWA does NOT enforce

This matters. Getting the scope wrong wastes energy on the wrong preparation.

• Right to work: stays with the Home Office. Immigration Enforcement, not the FWA, conducts illegal working visits and issues civil penalties.
• Tips: the FWA does not enforce tipping law. Disputes remain tribunal-only, initiated by workers.
• Sexual harassment prevention: enforced by the EHRC and through employment tribunals, not the FWA.
• Working time rest periods and breaks: primarily enforced through employment tribunals. HSE has some enforcement responsibilities under the Working Time Regulations, but not for individual rest break complaints.
• Holiday pay and SSP: the FWA is expected to take on enforcement in later phases. No date is fixed.

FWA powers

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

Obstructing an officer is a criminal offence. That includes refusing entry, withholding documents, and providing false information. There is no grace period. 7 April is live.

The Act also gives the Secretary of State the power to apply to the court for Labour Market Enforcement Orders requiring specific corrective steps. Breaching an LMEO is a criminal offence. The FWA's power to bring employment tribunal proceedings on individual workers' behalf is on the statute book but is not yet operationally live.

Why the scope still matters to you

The FWA's direct enforcement remit is narrower than many summaries suggest. But during an NMW investigation, officers can access your computer systems and employment records broadly. Problems visible in those records (working time breaches on your rota, missing employment contracts, gaps in your tipping records) may not result in FWA enforcement action directly, but they can trigger referrals to the relevant body, and they signal a business that isn't in control of its compliance.

An NMW investigation that opens your payroll will also reveal accommodation offset calculations, training time, and agency worker pay. The practical effect is that getting your NMW house in order forces you to get adjacent records in order too.

Changes that are NOT live yet

Per the government's implementation timeline:

• Unfair dismissal reform (qualifying period dropping to six months): January 2027
• Zero-hours contracts and guaranteed-hours package: later 2027
• Fire-and-rehire restrictions: January 2027
• "All reasonable steps" sexual harassment standard: October 2026
• Tipping law tightening (worker consultation, triennial review): October 2026
• Holiday pay and SSP enforcement by the FWA: later phases, no date fixed

For more detail on the FWA's powers, inspection process, and NMW traps specific to hospitality, see our FWA inspection briefing.

What an FWA inspection covers

The records FWA officers can require under Part 5 powers. Items marked with an asterisk fall within the FWA's direct day-one enforcement remit (NMW, agency standards, gangmasters licensing).

• Payroll records demonstrating NMW compliance, including accommodation offset calculations where applicable *
• Time records showing hours worked, not just contracted hours *
• Employment contracts or written statements of terms for every worker *
• 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 (tribunal enforcement, not FWA; three-year retention is required by statute)
• Sexual harassment prevention evidence: risk assessment, policy, training records (EHRC enforcement, not FWA)

HMRC's NMW caseload on hospitality focused consistently on accommodation offset miscalculations, uniform and deposit deductions, unpaid training time, and rota rounding. The transfer to the FWA brings that evidence profile under a single enforcement body with broader access to rota, POS, and payroll systems on the premises.