The Fair Work Agency has been live since 7 April 2026, and it can inspect your records, order you to repay underpaid wages, and add a fine on top. If you employ shift workers anywhere in the UK, the question is no longer whether this affects you, but whether your records would hold up if an inspector asked to see them.
This guide covers what the Fair Work Agency does, the powers it has over employers, the new record-keeping duty that already applies, and a checklist to get ready.
What the Fair Work Agency is, and what changed in April 2026
The Fair Work Agency is the UK's single body for enforcing employment rights, and it started operating on 7 April 2026. It was created by the Employment Rights Act 2025 (the legislation that began life as the Employment Rights Bill) as an executive agency of the Department for Business and Trade.
The bodies it replacesL
Before the FWA, enforcement was split across several organisations that rarely talked to each other. The agency brings three of them together:
- The Employment Agency Standards Inspectorate
- The Gangmasters and Labour Abuse Authority
- HMRC's national minimum wage enforcement team
What it can enforce
The agency's remit covers national minimum wage, holiday pay, statutory sick pay, agency worker rules, and labour exploitation including modern slavery. Some of these powers are already active, while proactive enforcement of holiday pay and statutory sick pay is being phased in and is expected to apply from 2027, increasing the risk that payroll mistakes and miscalculations will trigger formal enforcement. You can read the official remit on the GOV.UK Fair Work Agency page.
What powers does the Fair Work Agency have over employers?
The FWA's powers go well beyond what the old enforcement bodies could do, and they apply to businesses of any size with no small-employer exemption. The table below shows what each power means for you in practice.
| Power | What it means for you |
|---|---|
| Inspect premises and require records | Inspectors can ask to see contracts, rotas, timesheets and holiday records, and they do not need a worker to complain first. |
| Notice of underpayment | If they find underpaid wages, you must repay the affected workers within 28 days. |
| Civil penalty | On top of repayment, a fine of 200% of the underpaid amount, capped at £20,000 per worker, reduced to 100% if you pay within 14 days. |
| Tribunal claims on a worker's behalf | The FWA can take a case to an employment tribunal even when the worker does not bring it themselves. |
| Criminal offences | Obstructing an inspector or knowingly providing false records can lead to criminal charges and an unlimited fine. |
The shift in risk is the important part. A holiday pay error or other payroll management mistake that sat quietly for years used to be safe unless a worker noticed and made a claim. That assumption is gone.
The six-year holiday record rule every employer now has
The biggest immediate change for shift-based employers is a new duty to keep holiday records for six years. From 6 April 2026, the Employment Rights Act 2025 requires every employer to keep records showing they have met their statutory holiday and holiday pay obligations.
There is no set format; the records simply have to be good enough to prove compliance. They must cover irregular-hours and part-year workers too, which is most shift teams. Failure to keep adequate records is a criminal offence in its own right, punishable by a fine, and the FWA can look back at records dating to 6 April 2026.
For a hospitality or retail business where staff swap shifts, accrue holiday at different rates, and come and go seasonally, six years of accurate records is a serious ask if it lives in a spreadsheet that gets overwritten every week instead of an online shift planning system.
Your Fair Work Agency readiness checklist
Use this checklist to get your records and processes in order before the agency's enforcement powers ramp up. Each item is something you can check this month.
- Audit your holiday pay calculations for hourly employees, including rolled-up holiday pay for irregular-hours and part-year staff.
- Confirm you can hold holiday records for six years in a format you could hand over on request.
- Check how holiday accrues for zero-hours, part-year and seasonal workers, where errors are most common.
- Keep rotas, timesheets and break records in one accessible place, using robust employee timekeeping practices rather than spreading records across paper, chat messages and inboxes.
- Review minimum wage for any unpaid time, such as unrecorded overtime or rounding that pushes pay below the rate, and check how upcoming fair scheduling laws might affect your rota practices.
- Document how you handle statutory sick pay, monitor your absence rate and underlying causes, so the process is consistent and evidenced.
- Name one person responsible for handling a Fair Work Agency request, so a visit does not catch the team cold.
Download the checklist as a one-page PDF to keep on file or share with your team.
DownloadHow shift-based businesses stay ready
The records the Fair Work Agency can ask for are the same records a connected automated scheduling system and time-tracking system already produces. The rota you build, the hours your team clocks, the breaks they take, and the holiday they book all become the evidence of compliance, with no separate admin job to do later.
When those things sit in one time and attendance software system, you are not reconstructing six years of history from memory and old spreadsheets. You are pulling up records that were captured as the work happened.
Keep your records Fair Work Agency-ready with Shiftbase
Shiftbase keeps your employee scheduling, time tracking and absence management in one connected system, so the rotas, hours and holiday records the FWA can request are recorded automatically rather than rebuilt under pressure. Your team books leave and clocks in from their phones, balances update on their own, and everything stays in one place.
See what's included on the pricing page, or try Shiftbase free for 14 days and get your records in order before an inspector ever asks.
