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, HMRC's national minimum wage team, and the labour-market enforcement strategy function.

The consolidation reshaped enforcement without changing what employers owe. Legal responsibility for 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. Its 2026/27 budget is £60.1 million, against £47.4 million for the predecessor bodies, LRD reports from the government's Strategic Steer.

The live remit is narrow

Three areas came under the FWA from 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 takes over regulation of employment agencies and employment businesses. Enforcement liability under that regime sits with the agency or employment business; end-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 transfer, 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 EHRC and the tribunals, with the "all reasonable steps" standard arriving in October 2026.
• Rest periods and breaks mainly go to tribunals; HSE holds some Working Time Regulations responsibilities.
• Holiday pay and SSP 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.

The FWA's direct remit is narrower than many summaries suggest, but an NMW investigation opens the wider set of employment records where adjacent breaches show up. Working-time gaps on a rota, missing written statements, and tipping-record holes are not FWA-enforceable in themselves. They can still be referred to the body that does enforce them. NMW is also 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 the separate FWA inspection briefing.

The price of an underpayment

The FWA enforcement statement keeps the NMW penalty structure familiar: 200% of arrears, halved if the arrears and half the penalty are paid within 14 days, capped at £20,000 per worker, with arrears enforceable across a six-year lookback.

Obstructing an officer is a criminal offence. That includes refusing entry, withholding documents, and providing false information. The Act also gives the Secretary of State power to apply to the court for Labour Market Enforcement Orders requiring specific corrective steps, with breach of an LMEO also 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.

Still to come

The government's implementation timeline puts the next employment-rights changes in stages. 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 SSP 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)

An officer who comes in about pay can leave with all of it.