The Fair Work Agency (FWA) has published its first Delivery Plan for 2026/27, setting out how it will bring a more joined-up approach to labour-market enforcement across the UK.
For employers and payroll teams, the message is clear: while the Agency is still in its foundation year, expectations around National Minimum Wage (NMW), payslips and holiday pay are becoming more visible, more coordinated and increasingly data-led.
What is changing?
The FWA brings together existing labour-market enforcement expertise, including the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority and the Office of the Director of Labour Market Enforcement.
During 2026/27, NMW enforcement will continue to be delivered by HMRC under contract. The full transfer of NMW enforcement into the FWA is planned for April 2027, alongside the Agency’s anticipated new remit to enforce holiday pay.
The plan also signals a shift towards better use of intelligence, data and technology to identify serious non-compliance and labour exploitation. For responsible employers, the aim is to make compliance clearer and more accessible. For employers who underpay workers or fail to meet their obligations, enforcement is likely to become more joined-up and targeted.
The key payroll issues
The FWA’s plan specifically includes developing:
- An online payslip explainer
- A holiday-pay calculator
- Clearer guidance and simpler compliance tools
- Improved intelligence and case-management systems to support enforcement
These areas should be familiar territory for payroll teams. Payslips, NMW and holiday pay are not separate compliance topics – they are closely connected through the accuracy of payroll data, pay elements, calculations and processes.
Particular care is needed where pay arrangements are more complex, including variable hours, overtime, bonuses, allowances, salary sacrifice, deductions and irregular working patterns. These factors can affect both NMW calculations and holiday pay.
Compliance is not enough if you cannot evidence it
Getting the calculation right matters. Being able to evidence why it is right matters too.
As enforcement becomes more data-led, employers should be able to demonstrate the basis of their approach. That means having a clear and accessible audit trail showing:
- The source data used in calculations
- Which payments and deductions have been included or excluded, and why
- The calculation methodology applied
- Payroll controls and review processes
- How identified issues are investigated, corrected and prevented from recurring
This is particularly important for holiday pay and NMW. A business may have good intentions and generally sound processes, but if its approach cannot be explained and supported by records, it may struggle to demonstrate compliance when challenged.
What employers should do now
There is no need to wait until the FWA’s expanded remit begins in 2027. The next year is a valuable opportunity to take stock.
Payroll and HR teams should consider reviewing:
- NMW processes, especially for employees with non-standard pay arrangements
- Holiday-pay methodology and the treatment of variable pay
- Payslip content, clarity and accessibility
- Supporting records and calculation evidence
- The ownership, controls and escalation process for compliance issues
The work we have been doing with clients on NMW and holiday-pay assurance is designed for exactly this purpose: helping organisations build a practical, repeatable and defensible approach to compliance.
The Fair Work Agency’s arrival is intended to make compliance simpler for responsible employers. The best preparation is to ensure your payroll processes do not merely produce the right outcome, but can clearly evidence how and why they do so.
This article is intended as general information and does not constitute legal advice.