Fair Work Agency Faces Awareness Gap and Enforcement Criticism

The Fair Work Agency (FWA) is intended to sit at the centre of a more coordinated system for enforcing employment rights. Created through the Employment Rights Act 2025 and launched in April 2026, the agency brings together several labour market enforcement functions that were previously spread across different bodies.

The FWA's purpose is clear enough in principle: to protect workers, support fair competition and help ensure employers comply with the law. In practice, however, the early signs suggest that many employers and HR professionals are still unclear about what the Fair Work Agency does, how it will operate and what its arrival means for day-to-day compliance.

Limited Awareness Among Employers

A recent report by Occupational Health Assessment Limited suggests that awareness of the Fair Work Agency remains low. A survey of 140 senior HR professionals, representing organisations employing around 1.5 million workers globally, found that 92% had had no contact with the agency since it began operating. More significantly, 40% said they were unaware of the agency’s remit or responsibilities.

Only 3% reported active engagement with the new watchdog. That is a low figure for a body designed to improve compliance and provide a clearer enforcement route for employment rights.

The findings point to a communication problem. If HR leaders do not understand the agency’s role, many line managers and smaller employers are likely to be even less clear. That matters because the Fair Work Agency will not only be relevant to employers who deliberately breach the law. It may also affect businesses that make mistakes because of poor systems, weak record-keeping or misunderstanding of employment obligations.

The survey did not, however, show outright hostility to the agency. Just over a third of respondents thought it could improve understanding of employment obligations and encourage better compliance. Almost the same number were more sceptical, expecting it either to make little difference in practice or to add another layer of complexity to existing compliance arrangements. That split reinforces the need for clearer communication about what the Fair Work Agency is intended to do and how employers should prepare.

What the Fair Work Agency Will Do

The Fair Work Agency has been established to consolidate enforcement of key employment rights into one body. Its remit includes areas such as National Minimum Wage and National Living Wage enforcement, agency worker protections, the gangmasters licensing regime and action against serious labour exploitation.

It has powers to investigate breaches, issue civil penalties and take action against labour exploitation. Over time, the agency is also expected to take on additional enforcement responsibilities, including holiday pay.

The case for creating a single enforcement body is strong. Under the previous system, responsibilities were divided between different organisations, including HMRC’s National Minimum Wage enforcement unit, the Employment Agency Standards Inspectorate and the Gangmasters and Labour Abuse Authority. That made enforcement harder for workers to navigate and more fragmented for employers.

A more joined-up system should, in theory, make it easier to identify patterns of non-compliance, share intelligence and take targeted action where breaches are most serious.

However, the consolidation is not complete. Some important regulators and enforcement functions sit outside the new structure. The Equality and Human Rights Commission has not been brought within the Fair Work Agency’s structure, and agricultural wages enforcement also remains only partly covered by its remit. As a result, some commentators, such the Institute of Employment Rights (IER), argue that the new agency may not fully resolve the fragmentation that has long affected employment rights enforcement.

Why the Agency Has Been Criticised

The Fair Work Agency has already faced criticism from trade unions, academics and worker-rights organisations. Much of that criticism focuses on whether the agency will have the independence, funding and enforcement culture needed to make a meaningful difference.

One point of concern has been the government’s transitional priorities for the agency. The strategic steer for the Fair Work Agency includes aims such as reducing regulatory burdens, improving intelligence and data, increasing public awareness and preparing for wider operational changes. Critics argue that placing reducing regulatory burdens alongside worker protection risks sending the wrong message from the outset.

That criticism is not simply rhetorical. The fear is that the agency could be pulled in two directions: supporting compliant employers and reducing administrative pressure on business, while also being expected to take firm action against serious workplace abuse. Both aims may be legitimate, but the balance matters. If too much emphasis is placed on guidance and voluntary compliance, the agency may struggle to deter employers who deliberately break the law.

Funding and Enforcement Capacity

Another major concern is resourcing. Academic and policy briefings have warned that the Fair Work Agency is taking over an already stretched enforcement system. Real-terms funding for core labour market enforcement bodies has fallen significantly over the past 15 years, while inspections and enforcement activity have also declined.

That matters because enforcement depends on capacity. A regulator can have strong legal powers on paper, but those powers are of limited practical value if it lacks enough inspectors, regional presence, data capacity and legal resources to use them.

Critics have also questioned the agency’s initial enforcement stance. Statements suggesting that formal powers should be used sparingly have led some to argue that the agency may rely too heavily on encouraging voluntary compliance. A risk-based approach can make sense where most employers are trying to comply. However, it may be inadequate where workers face deliberate underpayment, labour exploitation or repeated non-compliance.

The Reporting Barrier for Vulnerable Workers

A further concern is whether migrant workers will feel able to report workplace abuse to the Fair Work Agency. For the agency to be effective, workers must be confident that raising concerns about underpayment, unlawful deductions, unpaid holiday or poor working conditions will not expose them to immigration consequences.

This is important because insecure immigration status can make workers more vulnerable to exploitation. Some employers may use that insecurity to discourage complaints, knowing that workers may be afraid to approach enforcement bodies even where their employment rights have been breached.

This has led to calls for a clear separation between labour market enforcement and immigration enforcement. Without that protection, the workers most at risk of exploitation may be the least likely to report it. This weakens the Fair Work Agency’s ability to identify serious abuse and take action against employers who rely on fear to avoid scrutiny.

The Challenge Now Facing the Fair Work Agency

The Fair Work Agency has been created with an ambitious purpose: to make employment rights enforcement clearer, more coordinated and more effective. That ambition is welcome, particularly in areas where workers may struggle to enforce basic rights and where compliant employers can be undercut by businesses that ignore the law.

However, the agency’s early challenge is one of credibility. Low awareness among HR professionals suggests that its role is not yet well understood. At the same time, criticism over funding, enforcement priorities, fragmentation and safe reporting for vulnerable workers raises questions about whether it will be able to deliver more than a rebranding of the existing system.

For the Fair Work Agency to succeed, it will need to be visible, properly resourced and clear about its enforcement approach. Guidance and voluntary compliance have a role, but they must be backed by a credible risk of investigation, penalties and firm action where employers deliberately breach employment rights.

The agency’s effectiveness will therefore depend on more than its legal powers. It will depend on whether employers understand what is expected of them, whether workers trust the agency enough to report abuse, and whether serious non-compliance is met with meaningful consequences. Until that becomes clear, the Fair Work Agency remains an important development, but one whose practical impact is still to be tested.