What is the Fair Work Agency?
The Fair Work Agency is a new UK Government enforcement body that came into operation on 7 April 2026. It consolidates the enforcement powers previously split across three separate agencies, HMRC's National Minimum Wage enforcement team, the Employment Agency Standards Inspectorate, and the Gangmasters and Labour Abuse Authority, into a single organisation with broader reach and more coordinated inspection capability.
For Devon employers, particularly those in care, hospitality, cleaning, retail and seasonal tourism, it represents a significant shift in how employment compliance is enforced.
What does the Fair Work Agency inspect?
The FWA has powers to inspect and enforce across the following areas:
- National Minimum Wage and National Living Wage compliance, including the new £12.71 adult rate from April 2026
- Holiday pay, including rolled-up holiday pay arrangements and variable-hours worker calculations
- Employment contracts and written statements of particulars
- Right to work documentation
- Employment agency conduct and worker rights
- Modern slavery and labour exploitation
- Sleep-in and on-call pay arrangements, particularly relevant for care providers
Unlike its predecessor bodies, the FWA can pursue multiple breaches in a single investigation rather than referring separate issues to separate agencies. An inspector arriving to check minimum wage records can also examine holiday pay, right to work files and contract documentation in the same visit.
Who is most at risk in Devon?
The FWA has indicated it will prioritise sectors with historically high rates of non-compliance. In Devon, that points clearly to:
Care providers
Sleep-in pay remains one of the most misunderstood NMW obligations in the sector. Following the Supreme Court's 2021 ruling, there is no universal industry practice. Different providers apply different approaches, and some remain exposed. The April 2026 NLW increase compounds this. A care home with 10 staff on sleep-in shifts could be carrying thousands of pounds of back-pay liability without knowing it.
Hospitality and tourism
Devon's seasonal workforce means variable hours, irregular contracts, and informal arrangements that look fine during a busy August but fall apart under inspection. Rolled-up holiday pay, tip allocation and zero-hours contracts are all areas the FWA is actively scrutinising.
Hair and beauty salons
Chair rental and self-employment arrangements in salons have been an enforcement focus for years. The FWA inherits and expands on this. If someone works your hours, in your space, using your equipment, the label "self-employed" may not survive an FWA investigation.
Cleaning and facilities management
High turnover, agency workers, subcontractors and minimum-wage employment, the sector profile the FWA was created to target.
What happens during an FWA inspection?
Inspections can be announced or unannounced. The FWA can request:
- Payroll records going back six years
- Employment contracts and offer letters
- Right to work documentation for every worker
- Holiday pay calculation records
- Working time records including sleep-in logs
- Evidence of NMW compliance including any deductions for accommodation, uniform or tools
Where breaches are found, the FWA can issue a Notice of Underpayment requiring back payment to workers, impose a financial penalty of up to 200 percent of the underpayment, name the employer publicly, and refer serious cases for criminal prosecution.
The most common gaps we see in Devon businesses
Based on employment compliance audits across care, hospitality and service businesses, the gaps that surface most consistently are:
- Holiday pay calculated on basic hours only, ignoring regular overtime, non-compliant since the 2019 Harpur Trust ruling
- Sleep-in pay not benchmarked against NMW since the 2021 Royal Mencap Supreme Court ruling
- Right to work checks completed but not documented, the check happened, the record does not exist
- Written contracts not updated to reflect the April 2026 NLW rate changes
- Variable-hours workers without a written contract at all
- Deductions for accommodation or uniform that take net pay below NMW without the employer realising
None of these are intentional. Most Devon employers are not deliberately underpaying their staff. The problem is that the rules are complex, they change, and the cost of keeping up with them is hard to justify when you are running a business on tight margins.
What a Fair Work Agency pre-assessment involves
A TestSafe FWA pre-assessment works through the same areas an inspector would examine, before they arrive. We visit your premises, work through your payroll records, contracts, right to work files and working time logs, and produce a written gap analysis. You leave knowing exactly what an inspector would find and what to fix on your own terms.
We are not a law firm. We do not provide regulated legal advice. What we do is audit your employment compliance against current legislation, identify the gaps, and give you a plain-English action list. For anything that needs a solicitor, we will tell you.
The service takes half a day for a small employer and a full day for a medium-sized care or hospitality business. The written report follows within five working days.
Why TestSafe rather than a national HR consultancy
We started TestSafe because we were frustrated with the way national compliance businesses operate in Devon. Expensive retainers. Generic advice. One annual visit followed by a report that sits in a drawer. No understanding of how a small care home or a busy kitchen actually works.
We work differently. We get to know your business. We help you implement the recommendations rather than just delivering them. We come back. We build a working relationship rather than a client file. And we charge what a Devon SME can actually afford rather than what a corporate would charge for the same paperwork.
The Fair Work Agency is new, its powers are real, and the window to get ahead of an inspection on your own terms is right now.
Book a Fair Work Agency pre-assessment
If you run a Devon business in care, hospitality, tourism, cleaning or any sector with variable-hours workers, we can work through your FWA exposure with you before anyone else does.
This article is for general information only and reflects the law as it stood on the date of publication. It does not constitute legal advice and should not be relied upon as a substitute for advice specific to your situation. TestSafe Compliance provides audit and assessment services only. Where a specific legal question arises, seek advice from a qualified solicitor or employment law specialist.