The Fair Work Agency was established on 7 April 2026 under the Employment Rights Act 2025, consolidating labour market enforcement that previously sat across several bodies. It can inspect workplaces, compel production of documents, require employers to put things right, issue penalties and prosecute. For recruitment businesses the practical question is narrower: which records will it ask for, and can you produce them.
Agencies are squarely in scope, because the Agency inherited responsibility for the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003 alongside its wider remit.
What the Agency Replaced
Before April 2026, a recruitment business dealing with a complaint about unlawful fees might hear from the Employment Agency Standards Inspectorate, while national minimum wage matters came from HMRC and labour exploitation from a separate body. Each had its own thresholds, processes and appetite.
Consolidation removes the gaps between those remits. A single complaint can now be examined against conduct regulations, wage legislation and exploitation provisions by one body with a single evidence file. The Agency has also said it will take a proactive approach in sectors it assesses as higher risk, rather than waiting for complaints.
The Powers That Matter to an Agency
Inspection and Document Production
The Agency can enter workplaces and require employers to produce records demonstrating compliance with employment law. The powers are modelled on those the predecessor bodies held, which means they are familiar in substance and now exercisable by one organisation across a broader field.
Requiring Remediation
Rather than only penalising past conduct, the Agency can require an employer to put things right. That may mean back pay, corrected records or changed practice, and compliance with a notice becomes its own obligation.
Penalties and Prosecution
The Agency can issue penalties and prosecute serious offences. Prosecution is reserved for the worst conduct, but the existence of a criminal route changes the calculation on matters previously treated as administrative.
The Records an Agency Should Expect to Produce
The Conduct Regulations already require specific records, and most agencies hold them somewhere. Producing them quickly and completely is a different discipline. Work through this list against your own systems and ask, for a named worker on a named assignment, how long retrieval actually takes.
- Terms with the work-seeker, issued before services were provided, including whether they are engaged under a contract of employment or a worker's contract.
- Terms with the hirer, including the charges and any transfer fee provisions.
- Details of each assignment offered and filled, with dates, rates and hours.
- Evidence of the qualifications and authorisations you verified where the role required them.
- Evidence of the checks required where the work involves vulnerable people.
- Records of payments to work-seekers and charges to hirers, reconcilable against the assignment.
- Right to work check evidence, retrievable per engagement rather than per person.
- Records of any complaint and how it was handled.
Retention under the Conduct Regulations runs to at least one year from the end of the relevant period, and other regimes require considerably longer. Design retention around the longest applicable period rather than the shortest.
Where Agencies Most Often Fail
Terms Issued Late
Terms must be given before services are provided. Sending them with the first timesheet is a breach, and it is visible in timestamps.
Charging Work-Seekers
Fees to work-seekers for finding work are prohibited outside narrow excepted categories. Charges dressed as administration, onboarding, training or equipment attract attention, and the substance is what counts rather than the label.
Records Spread Across Systems
Assignment data in one system, payroll in another, compliance documents in a shared drive and right to work evidence in a consultant's mailbox. Each individually defensible, collectively unproducible.
Second-Tier Supply Nobody Mapped
Where you sub-contract supply, the Agency will ask about the arrangement. An unmapped chain reads as an absence of control, and the same gap now exposes you on tax and immigration.
Why This Sits Alongside Two Other Changes
April 2026 also brought the new PAYE rules for labour supply chains that include umbrella companies, moving responsibility to the agency closest to the end client. From 1 October 2026, section 48 of the Border Security, Asylum and Immigration Act 2025 extends right to work obligations to workers on a worker's contract and to individual sub-contractors, with liability running up contractual chains.
Three regimes, one year, one underlying assumption: the business that controls the chain should be able to see inside it and evidence what happens there. An agency that builds a single supply chain assurance file serves all three with the same work. An agency that treats them separately does the work three times and still has gaps between them.
Preparing Without Buying Anything
Most of what the Agency will ask for already exists. The gap is organisation, not information. A useful exercise takes a morning.
- Pick three workers at random from the last twelve months, ideally across different assignment types.
- Set a timer and assemble the full record set listed above for each.
- Note every item you could not find, and every system you had to ask someone else to search.
- Fix the retrieval path rather than the individual documents. The documents were not the problem.
- Repeat quarterly, and record that you did it.
Evidence of a self-audit programme is itself useful. It demonstrates a compliance culture rather than a compliance folder, and that distinction tends to influence how an enforcement conversation develops.
If the Agency Contacts You
Treat the first contact as the start of a documented process. Establish what is being examined and under which provisions. Nominate a single point of contact so answers are consistent. Produce what is requested, completely and on time, and say so when something will take longer rather than letting a deadline pass.
Take advice early where a matter could reach penalty or prosecution. And do not remediate quietly without recording it, because undocumented corrections look worse than documented ones.
Frequently Asked Questions
Does the Fair Work Agency Replace Employment Tribunals?
No. Tribunals decide disputes between individuals and employers. The Agency enforces standards on behalf of the state. The same facts can produce both, and records prepared for one serve the other.
Can Workers Complain Directly About an Agency?
Yes. There is a published route for complaints about recruitment agencies alleging breaches of the Employment Agencies Act 1973 or the Conduct Regulations 2003. Complaints are a common trigger for wider examination.
Are We Inspected Even If Nobody Complains?
The Agency has stated it will adopt a proactive approach in situations it identifies as higher risk. Absence of complaints is not a reason to assume you will not be examined.
What About Northern Ireland and Scotland?
Employment law is largely reserved for Great Britain with separate arrangements in Northern Ireland, and some Employment Rights Act provisions commence on different dates in Scotland. Check the position for the jurisdictions you operate in.
Does a Compliant Umbrella Reduce Our Exposure Here?
It reduces tax exposure. It does not discharge your obligations under the Conduct Regulations, which attach to you as the employment business regardless of who runs the payroll.
The Point
Enforcement has been consolidated, given a proactive mandate and handed the power to compel documents. None of that is a problem for an agency that can produce its records. It is a serious problem for one that cannot, and the difference is almost entirely a matter of how information is stored rather than whether the underlying practice was sound.
Test retrieval before somebody else does.
This article is general information about the enforcement framework, not legal advice. Take specialist employment law advice on your own arrangements.
Sources
Fair Work Agency. About the Fair Work Agency.
https://www.gov.uk/government/organisations/fair-work-agency/about
Fair Work Agency. Fair Work Agency: Enforcement Policy Statement.
https://www.gov.uk/government/publications/fair-work-agency-enforcement-policy-statement/fair-work-agency-enforcement-statement
Fair Work Agency. Fair Work Agency Delivery Plan 2026 to 2027.
https://www.gov.uk/government/publications/fair-work-agency-delivery-plan-for-2026-to-2027/fair-work-agency-delivery-plan-2026-to-2027
Fair Work Agency. Making a Complaint to the Fair Work Agency About Your Recruitment Agency.
https://www.gov.uk/government/publications/making-a-complaint-to-the-fair-work-agency-about-your-recruitment-agency/making-a-complaint-to-the-employment-agency-standards-inspectorate-eas-about-your-recruitment-agency
The Stationery Office. The Conduct of Employment Agencies and Employment Businesses Regulations 2003.
https://www.legislation.gov.uk/uksi/2003/3319/contents
The Stationery Office. Employment Agencies Act 1973.
https://www.legislation.gov.uk/ukpga/1973/35/contents
Department for Business and Trade. Implementing the Plan to Make Work Pay and Employment Rights Act: Timeline Update.
https://www.gov.uk/government/publications/implementing-the-plan-to-make-work-pay-and-employment-rights-act/plan-to-make-work-pay-and-employment-rights-act-timeline-update
HMRC. PAYE Rules for Labour Supply Chains That Include Umbrella Companies From 6 April 2026.
https://www.gov.uk/guidance/paye-rules-for-labour-supply-chains-that-include-umbrella-companies-from-6-april-2026
The Stationery Office. Border Security, Asylum and Immigration Act 2025, Section 48.
https://www.legislation.gov.uk/ukpga/2025/31/section/48
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