Fair Work Agency

What enforcement powers the Fair Work Agency will have

The Fair Work Agency is being set up as a single, strengthened enforcement body to oversee workplace rights. It will take over and expand the enforcement roles currently handled by multiple bodies (such as HMRC’s National Minimum Wage team, the Employment Agency Standards Inspectorate, and the Gangmasters & Labour Abuse Authority) and give them broader powers under one roof.

Here’s what the FWA will be able to do:

1. Investigate and inspect

• Enter business premises and inspect records relating to employment compliance.

• Require employers to provide documents, information, and evidence of compliance.

• Interview workers and representatives as part of investigations.
  Failure to cooperate may itself be a criminal offence.

2. Enforce statutory payments

The Agency will be able to tackle failures to pay key statutory entitlements, including:

• National Minimum Wage

• Statutory Sick Pay (SSP)

• Statutory Holiday Pay (a new area of enforcement)
  This includes issuing Notices of Underpayment requiring employers to repay amounts owed to workers.

3. Impose financial penalties

The FWA will be able to apply penalties on top of arrears owed. For example:

• Penalties can be up to 200% of the underpayment, capped at a limit per worker.

• Paying promptly (e.g., within a set period) may reduce the penalty.
  These penalties are payable to the government’s Consolidated Fund, not to the workers.

4. Bring claims on behalf of workers

The FWA can bring Employment Tribunal proceedings on behalf of a worker - even if the worker themselves doesn’t want to pursue a claim. This is a significant shift from current enforcement, which largely relies on individuals bringing their own claims.

5. Cost recovery and compliance undertakings

• The Agency can recover enforcement costs from employers who do not comply.

• It may require employers to give enforcement undertakings to improve compliance.

6. Expanded remit over time

While its initial remit focuses on key statutory rights like minimum wage, SSP, holiday pay and agency worker protections, future regulations could expand the FWA’s powers and the types of rights it enforces.

In summary

The Fair Work Agency is not just a “helpline” or advisory body - it will be a powerful enforcement authority with the ability to investigate, require documents and access, issue financial penalties, and take legal action on behalf of workers. This marks a significant shift towards more proactive regulatory oversight of employment law in the UK.