New Fair Work Agency cracks down on nearly 400 companies for rogue payroll and unpaid wages
The UK’s temporary labour market is facing its biggest shake-up in a generation. From 6 April 2026, the launch of the Fair Work Agency (FWA) will fundamentally change the relationship between agency contractors, umbrella companies, and the recruitment firms that hire them.
For the estimated 700,000 workers operating through umbrella arrangements, the days of life-changing back-tax bills and hidden holiday pay deductions are being targeted by a new regulator with “teeth.”
Have companies already been penalised?
389 employers from across the UK have already been named for failing to pay workers the minimum wage to tens of thousands of workers. Among the companies are well-known brands that have faced the consequences for failing to pay the minimum wage, resulting in £12.6 million in penalties
Around 60,000 workers have been found to have been underpaid, as employers who break the rules are held to account. If workers suspect they are being underpaid, they can visit gov.uk/checkyourpay to find out more about what they can do.
- Workers can visit the Acas website for free, impartial and confidential advice or complain to HM Revenue and Customs (HMRC) at Pay and work rights helpline and complaints
- The minimum wage law applies to all parts of the UK.
- Employers should always carry out the necessary checks – see the guidance: Calculating the Minimum Wage
- HMRC consider all complaints from workers, so workers are being reminded to check their pay with advice available through the Check your pay website
National Living Wage and National Minimum wage rates:
| Date effective | 21 and over | 18 to 20 | Under 18 | Apprentice |
| April 2025 | £12.21 | £10 | £7.55 | £7.55 |
| April 2026 | £12.71 | £10.85 | £8 | £8 |
Who is heading the FWA?
The government has appointed a power duo to lead the agency, signalling a move toward aggressive enforcement and strategic reform:
Chair: Matthew Taylor CBE is the author of the landmark 2017 Taylor Review of Modern Working Practices, Taylor is the architect of the “Good Work” agenda. His background as a former policy chief for both Labour and Conservative governments suggests a pragmatic but firm approach to worker rights.
CEO: Lisa Pinney MBE is a veteran of the Environment Agency with over 20 years of experience tackling environmental crime. Pinney is known for “tackling rule breakers head-on.” Her appointment indicates that the FWA will treat employment law breaches with the same forensic severity as criminal pollution.
The ‘Joint Liability’ shield: Good news for contractors
Under the new Joint and Several Liability (JSL) rules, the financial risk of unpaid taxes is moving up the chain.
If an umbrella company fails to pay PAYE or National Insurance, HMRC will no longer chase the individual contractor for the debt. Instead, they will pursue the recruitment agency or the end-client. This “absolute liability” is expected to trigger a “flight to quality,” where agencies only work with the most transparent, audited umbrella providers.
Essential Changes for Umbrella Workers
| Feature | Old System (Pre-April 2026) | New System (FWA Era) |
| Holiday Pay | Often “rolled up” or withheld by rogue umbrellas | Proactively enforced by the FWA as a statutory right |
| Sick Pay | 3-day waiting period; lower earnings limit | Day-one right for all workers; no waiting period |
| Tax Risk | Contractors often liable for umbrella “tax schemes” | Agencies and clients are liable for unpaid tax debts |
| Enforcement | Fragmented (HMRC, EAS, GLAA) | Single point of contact: The Fair Work Agency |
How to blow the whistle: Alerting the FWA
The FWA isn’t just waiting for formal tribunal claims; it operates on “intelligence-led” enforcement. If you believe your umbrella company is withholding holiday pay, making unlawful deductions, or failing to provide a clear Key Information Document (KID), you can take action:
- The FWA Hotline: A dedicated reporting line (0800 432 0804) allows workers to report issues anonymously.
- Online Referrals: The GOV.UK Fair Work portal provides a secure way to submit evidence of wrongdoing.
- Proactive Inspections: FWA officers have the power to enter business premises and seize records without a prior complaint.
Tip: From April 2026, your employer (e.g., an agency, employer or umbrella company) is legally required to keep your pay and holiday records for six years. If they cannot produce them upon an FWA request, they face fines of up to 200% of the underpayment.
What should you do now?
If you are a contractor, review your current umbrella arrangement. Ask for a Key Information Document and ensure your payslips explicitly break down every deduction and the information they provide matches what HMRC has on your NI payments.
With the FWA launching this month, compliant agencies will be eager to move you to new payroll and umbrella providers to protect themselves from new liability laws. Make sure you ask your employer that your wages and pension transfers are not delayed.
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