That’s the question more UK employers should be asking themselves right now.
Employment law has been changing rapidly over the last few years. New rights, updated obligations, and increasing expectations around record-keeping have already created pressure for employers trying to stay compliant.
Now, as of 7 April 2026, there’s another major development businesses need to be aware of: the introduction of the Fair Work Agency (FWA) and we have already heard reports of businesses being contacted.
The Fair Work Agency forms part of the government’s wider “Make Work Pay” agenda and has been created to strengthen enforcement of employment rights across UK businesses.
For employers, this means one thing very clearly:
It’s no longer enough to intend to comply with employment law. You need to be able to evidence it quickly, clearly and consistently.
And for many businesses, that starts with reviewing employment contracts, policies and HR processes before issues arise.
Why Employers Should Be Reviewing Their Contracts and Policies Now
For many businesses, the biggest employment law risks are not deliberate wrongdoing.
They’re the small compliance gaps that build up quietly over time:
• Employment contracts that haven’t been updated in years
• Holiday pay calculations handled inconsistently
• Missing or outdated policies
• Informal working arrangements that no longer reflect reality
• Incomplete HR records
• Managers following different processes
• Agency worker arrangements that were never properly reviewed
These issues are incredibly common, especially in small and medium-sized businesses where HR responsibilities are often shared across managers, finance teams or business owners themselves.
And importantly, this is not just something affecting large employers.
We’ve already started hearing reports of businesses from companies with as few as four employees through to much larger organisations being contacted by the Fair Work Agency.
That’s a reminder that no business is really “too small” to attract scrutiny. If contracts, policies and records aren’t up to date, the risks can escalate quickly.
If your business was asked tomorrow to provide:
• Employment contracts
• Holiday pay records
• Staff policies
• Payroll information
• Working time records
• Sickness absence records
• Evidence of procedures being followed consistently
…would everything be accurate, compliant and easy to access?
For many employers, the honest answer is probably:
“Not entirely.”
And that’s exactly why now is the right time to review things proactively.
What Businesses Should Be Doing Now
The introduction of the Fair Work Agency is a good opportunity for employers to carry out a wider employment law health check.
Key areas to review include:
Employment contracts
Do your contracts reflect current legislation and actual working arrangements?
Outdated contracts are one of the most common issues employers face, particularly where businesses have grown quickly or employment practices have evolved.
Workplace policies and staff handbooks
Policies should be legally compliant, practical and consistently applied across the business.
At a minimum, employers should review policies relating to:
• Holiday and holiday pay
• Sickness absence
• Flexible working
• Disciplinary and grievance procedures
• Equality and harassment
• Working time
• Agency and temporary workers
Holiday pay and payroll processes
The Fair Work Agency now has significant powers to investigate holiday pay and wage compliance.
Even small payroll errors repeated over time can become expensive very quickly.
HR records and documentation
As of April 2026, employers are legally required to maintain adequate holiday and holiday pay records for up to six years.
Businesses should also ensure employee records are organised, accessible and consistently maintained.
Manager training and consistency
Policies are only effective if managers understand them and apply them consistently in practice.
This is often where businesses become vulnerable without realising it.
What Is the Fair Work Agency?
The Fair Work Agency is a new government enforcement body introduced through the Employment Rights Act.
It combines the responsibilities of several previous enforcement bodies into one central agency, including:
• The Gangmasters and Labour Abuse Authority (GLAA)
• The Employment Agency Standards Inspectorate (EAS)
• HMRC’s National Minimum Wage enforcement team
Previously, employment law enforcement was fragmented.
The Fair Work Agency changes that by creating a more coordinated and proactive enforcement approach with broader powers and greater oversight.
Its focus includes:
• National Minimum and Living Wage compliance
• Holiday pay and statutory pay
• Employment contracts and written terms
• HR record-keeping
• Worker exploitation and fair treatment
• Agency worker arrangements
Importantly, the Fair Work Agency can investigate businesses even without an employee complaint being made.
What Powers Does the Fair Work Agency Have?
The Fair Work Agency has broad enforcement powers, including the ability to:
• Inspect workplaces
• Request documentation
• Recover unpaid wages and holiday pay
• Issue financial penalties
Businesses may be required to provide:
• Employment contracts
• Policies and handbooks
• Payslips and payroll records
• Holiday records
• Working hours records
• Internal communications
• Termination paperwork
If documents are missing, inconsistent or outdated, it can quickly create wider scrutiny.
The agency can issue Notices of Underpayment covering:
• Unpaid wages
• Holiday pay
• Statutory Sick Pay
• National Minimum Wage breaches
Claims can go back up to six years.
Penalties can reach:
• 200% of underpayments
• Up to £20,000 per worker
Businesses may also face reputational damage through public naming in some cases.
Why Proactive Employment Law Support Matters
One of the clearest themes behind the Fair Work Agency is evidence.
If your business is investigated, the question won’t simply be:
“Are you doing the right thing?”
It will also be:
“Can you prove it?”
That means employers need contracts, policies and processes that are:
• Legally compliant
• Up to date
• Consistent with actual working practices
• Properly communicated
• Easy to evidence when required
This is where proactive legal support can make a significant difference.
Orchard Employment Law works with businesses to review and strengthen employment contracts, policies and HR documentation so employers can stay compliant and reduce risk before problems arise.
Whether you need:
• Updated employment contracts
• Bespoke workplace policies
• A staff handbook review
• Holiday pay compliance checks
• Support with HR procedures
• Advice around agency workers
• Ongoing employment law support
Our team can help identify gaps early and put robust protections in place.
Because when enforcement increases, prevention is almost always cheaper and far less stressful than dealing with investigations, penalties or employment tribunal claims later.
Don’t Wait Until There’s a Problem
The Fair Work Agency hasn’t necessarily created entirely new obligations for employers.
What it has done is increase the likelihood that businesses will need to demonstrate compliance clearly and confidently.
For many employers, now is the right time to review contracts, policies and HR processes before scrutiny arrives.
If you’re not completely confident your documentation would stand up to investigation, it may be time for a review.
Contact Orchard Employment Law at 01634 564136 for practical, commercially-focused employment law support tailored to your business or organisation.