UK Fair Work Agency launches with 550 inspectors and six-year clawback powers

The UK’s Fair Work Agency officially launched on 7 April 2026, consolidating three existing enforcement bodies into a single regulator with significantly enhanced powers. The FWA absorbs HMRC’s National Minimum Wage team, the Employment Agency Standards Inspectorate, and the Gangmasters and Labour Abuse Authority, deploying roughly 550 inspectors with the authority to investigate proactively – without waiting for a complaint.

Key enforcement powers include the ability to claw back up to six years of underpayments and fine employers up to 200% of amounts owed. For the first time, holiday pay enforcement will be handled at state level. The FWA also takes on enforcement of statutory sick pay (now payable from day one after the abolition of waiting days), and oversight of the new day-one rights to paternity and unpaid parental leave that took effect on 6 April.

For remote employers with UK-based workers – whether they are based in the UK or hiring cross-border – the FWA represents a step-change in enforcement capacity. Companies using contractor or umbrella structures should review their arrangements, as the agency has signalled that worker misclassification and underpayment are priority enforcement areas. Employers must now maintain holiday pay records for six years, adding a new administrative requirement for distributed teams.