PwC comments on the launch of the Fair Work Agency (FWA)

Anna Vishnyakov, workforce partner at PwC UK, comments on the launch of the Fair Work Agency (FWA), part of the government's Employment Rights Act: 

“The launch of the Fair Work Agency marks a material shift in how employment rights are enforced in the UK, bringing minimum wage, holiday pay and sick pay under a single, more visible enforcement framework. 

“One of the most immediate challenges for many employers will be holiday pay. While compliance in this area has historically been tested through employment tribunals, the introduction of a state‑led enforcement body, underpinned by a new statutory duty to maintain annual leave and holiday pay records, changes the way these rules are applied. This is a complex area, with regulation not being fully in step with modern working practices. For example, many businesses pay employees monthly, yet the holiday pay regulations are built on weekly calculations. These complexities can lead to potential risk, particularly for organisations with variable hours, overtime or layered pay structures, and in sectors such as consumer, retail, leisure and manufacturing. 

“As this new agency beds in, getting the balance right between enforcement and practical support for employers will be critical. With enforcement activity likely to become more visible, the potential reputational and employee relations implications of non‑compliance will increase. Employers should be using this moment to stress‑test their data, payroll systems and governance, rather than waiting for enforcement activity to expose gaps.”