COMPLIANCE
The Fair Work Agency: the future of enforcement
Jeni Morris, Head of the National Minimum Wage (NMW) Team, EY, talks us through the establishment of the Fair Work Agency (FWA), discussing what it is, what it aims to do and the reasons behind why it’s being created
A s payroll professionals, we stand at the forefront of an evolving landscape in employment rights and compliance. The UK government is set to introduce a transformative initiative which will reshape how we approach payroll and employment law: the establishment of the FWA. This new enforcement agency, part of the Employment Rights Bill, is designed to streamline and enhance the enforcement of employment rights across the UK. What will this mean for you and your organisation? What is the FWA? The FWA will operate as an executive agency under the Department of Business and Trade (DBT). This agency aims to be a single, recognisable brand that both workers and employers can turn to for assistance with employment rights issues. The FWA will aim to serve as a central hub for information, guidance and enforcement, making it easier for payroll professionals to navigate the complexities of employment law. What will the FWA do? The FWA will take on a multifaceted role in the enforcement of employment rights, combining the functions of several existing bodies into one cohesive agency. Here’s a closer look at their key responsibilities: Enforcing employment rights The FWA will merge the enforcement roles of various organisations, including: l HM Revenue and Customs’ (HMRC’s) NMW Enforcement Team l The Gangmasters and Labour Abuse Authority, which addresses modern slavery issues l The Employment Agency Standards Inspectorate, focussing on agency workers.
Expanding enforcement areas The agency will broaden its scope to include:
rights. The FWA seeks to empower these individuals and ensure they can access the protections they deserve. Level the playing field By taking decisive action against non- compliant businesses, the FWA will foster fair competition among employers who adhere to the law. Expand enforcement The agency will have the authority to enforce a broader range of employment rights than current bodies, with the potential to add more responsibilities in the future. It’s widely expected that enforcement will follow a similar path to that already taken by HMRC’s current NMW enforcement team, including penalties and naming and shaming. Create a balanced approach The FWA aims to support workers in accessing their rights, and businesses in understanding and complying with the law, promoting a harmonious work environment. Looking ahead The FWA is expected to be operational by late 2026 at the earliest. This initiative represents a significant shift towards more robust enforcement of employment rights in the UK. As payroll professionals, you’ll play a crucial role in adapting to these changes, ensuring compliance and supporting your organisations in navigating this new landscape. In conclusion, the future of employment rights in the UK is bright with the introduction of the FWA. Embrace this change, stay informed and prepare to be a key player in fostering a fairer work environment for all. Welcome to the future! n
l enforcing holiday pay rights l overseeing statutory sick pay l imposing financial penalties for unpaid Employment Tribunal awards. Investigating and taking action With extensive powers, the FWA will be able to: l demand documents or information from businesses l enter business premises to examine and seize documents l request ‘labour market enforcement undertakings’ from those suspected of labour market offences. Supporting compliance The FWA hopes to provide guidance to help businesses understand and comply with employment laws, making your role as a payroll professional more straightforward. Why is the FWA being created? The establishment of the FWA is following in the shadow of the Single Enforcement Body, which was to be created by the previous government (but unfortunately never made if off the ground). The FWA is driven by several key motivations, which are to: Simplify enforcement The current enforcement system is often seen as complicated and fragmented. The FWA aims to create a more efficient process for both employees and employers. Improve access to rights Many workers, particularly those in lower- paid positions, struggle to enforce their
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| Professional in Payroll, Pensions and Reward |
Issue 109 | April 2025
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