The Fair Work Agency launched on 7 April 2026. It is the UK’s single enforcement body for workers’ rights. It replaces three separate agencies. It brings NMW, holiday pay, and agency compliance under one roof. If you work through an umbrella company, you need to know what it can do.
What is the Fair Work Agency?
The Fair Work Agency (FWA) is the UK’s single enforcement body for employment rights. It launched on 7 April 2026 under the Employment Rights Act 2025. It brings together three enforcement functions. These functions were separate before.
Before the FWA, three separate bodies handled enforcement:
- The Gangmasters and Labour Abuse Authority (GLAA) handled labour exploitation and licensing
- The Employment Agency Standards Inspectorate (EASI) regulated employment agencies
- HMRC’s National Minimum Wage team enforced NMW and living wage
All three now sit inside the Fair Work Agency. One body. One set of powers. One point of contact for enforcement.
The FWA can investigate employers, agencies, and umbrella companies. It can recover underpaid wages directly. It can name and shame non-compliant businesses. It has criminal investigation powers for the most serious labour abuse cases.
What does the FWA enforce?
The FWA enforces the National Minimum Wage and the National Living Wage. It enforces holiday pay obligations. It enforces employment agency standards. From 2027, it will also enforce holiday pay for workers with irregular hours. This includes umbrella contractors.
The FWA has overall responsibility for NMW enforcement from 7 April 2026. During 2026/27, HMRC continues to deliver NMW enforcement. HMRC works under a contract with the FWA. The full transfer of NMW staff and functions happens in April 2027. If an umbrella company fails to pay the National Living Wage floor, HMRC can investigate. HMRC can recover arrears. HMRC can issue civil penalties. The NLW floor is £12.71 per hour from April 2026. HMRC acts under FWA direction.
The FWA also enforces employment agency standards now. It can investigate agencies. Agencies must follow the Conduct of Employment Agencies and Employment Businesses Regulations 2003. The FWA checks for improper fee charging. It checks for contract problems. It checks for failure to give written terms.
Holiday pay enforcement for irregular workers is coming. It is not yet fully active. The FWA has the powers. But the regulations for umbrella contractor holiday pay come in 2027. Do not assume holiday pay enforcement runs at full strength now.
What does the FWA mean for umbrella contractors?
Umbrella contractors now have a clearer way to report underpayment. Contact the FWA if your umbrella fails to pay the NLW floor. Also contact the FWA if your umbrella withholds holiday pay. Before, you had to use three separate reporting routes. Now you use one.
Before April 2026, you had to contact different bodies for different issues. Now you contact the FWA for everything.
The practical change is simpler complaints and faster escalation. If your umbrella is underpaying NMW, you report it to the FWA. If your agency is withholding fees, you report it to the FWA. Same body. One complaint.
The FWA can require your employer to produce wage records. It can recover unpaid arrears. For serious exploitation cases, it has criminal referral powers.
What does the FWA mean for NMW and salary sacrifice?
The FWA enforces the National Living Wage as a floor. Your total pay cannot fall below £12.71 per hour. This is the April 2026 rate. All deductions count, including salary sacrifice. Umbrella companies must keep your pay above the NLW floor after salary sacrifice.
This is the practical limit on salary sacrifice for umbrella contractors. You cannot sacrifice so much into a pension that your remaining pay falls below minimum wage. Your umbrella must calculate this correctly.
From April 2025, employer NIC increased to 15%. This has reduced take-home pay for many contractors. An ethical umbrella company runs these calculations correctly every month and shows all deductions clearly on your payslip.
If you think your pay is below the NLW floor, check your payslip. Look at the gross wage line, not the assignment rate. It must be at least £12.71 per hour. This applies to every hour you worked.
What does the FWA mean for holiday pay?
Umbrella contractors are entitled to holiday pay. The standard rate is 12.07% of gross pay. This applies when your umbrella rolls holiday pay into your regular wages. Your contract must state this clearly. Your payslip must show it every time. For irregular-hours workers with accrued holiday, your umbrella must use the 52-week average method.
This is the Harpur Trust ruling from 2022, and it remains in force. Any umbrella using a flat 12.07% rate for accrued (not rolled-up) holiday pay is getting it wrong.
The FWA can investigate holiday pay underpayments from 2027. Holiday pay enforcement for irregular workers becomes fully operational then.
Read the full detail on umbrella company holiday pay. It covers rolled-up pay, accrued pay, and the 52-week average method.
You can also read a guide on umbrella holiday pay enforcement.
What should contractors check about their umbrella now?
Check that your payslip shows NLW-compliant gross pay. Check that it shows correct holiday pay. Check that all deduction lines are clear. If your umbrella cannot explain any deduction, raise it in writing. Also raise it if your net pay seems wrong. The FWA gives you a stronger way to enforce your rights if your umbrella ignores the complaint.
The FWA does not change what you are entitled to. It changes how well you can enforce it. Keep your records. Save your payslips, contracts, and correspondence. You will be in the best position to make a complaint.
Know your statutory employment rights before you need them.
Use the umbrella take home pay calculator to verify your take-home against a correct PAYE model.
Frequently Asked Questions
What is the Fair Work Agency?
The Fair Work Agency (FWA) is the UK’s consolidated employment rights enforcement body. It launched 7 April 2026 under the Employment Rights Act 2025. It brought together HMRC’s NMW team, the Employment Agency Standards Inspectorate, and the GLAA.
What does the Fair Work Agency enforce?
The FWA enforces the National Minimum Wage and National Living Wage. It enforces holiday pay obligations. It enforces employment agency standards. From 2027, it will enforce holiday pay more actively for irregular-hours workers. This includes umbrella contractors.
What is the FWA enforcement timeline for umbrella contractors?
The FWA launched on 7 April 2026. HMRC continues NMW enforcement under a contract with the FWA throughout 2026/27. Full transfer to the FWA happens in April 2027. Agency standards enforcement is live now. Full holiday pay enforcement for irregular-hours workers starts from 2027.
How does the FWA affect umbrella company holiday pay?
The FWA can investigate umbrella company holiday pay underpayments from 2027. The Harpur Trust ruling already requires umbrellas to use the 52-week average for accrued holiday pay with irregular hours.
What is the NLW floor for umbrella contractors after April 2026?
The National Living Wage is £12.71 per hour from April 2026. Your umbrella pay cannot fall below this floor. All deductions count, including salary sacrifice.
