For years, many small and medium-sized businesses have viewed payroll as a "set and forget" task. However, the launch of the Fair Work Agency (FWA) in April 2026 changes the stakes for every employer in the UK.

This new, single enforcement body merges the powers of several old agencies into one "super-regulator." Its mission? To proactively hunt down errors in holiday pay, Statutory Sick Pay (SSP), and National Minimum Wage compliance. At CoreAcc Accountants, we are urging our clients to perform a "internal audit" now, before the FWA begins its inspections.

What Can the Fair Work Agency Actually Do?

Unlike previous agencies that often waited for an employee to complain, the FWA has the power to launch proactive investigations. They can:

● Inspect Records: Demand access to your payroll data, time-sheets, and employment contracts without a specific reason.

● Issue Massive Fines: Civil penalties for minimum wage breaches remain high, but the FWA also has the power to issue "public notices" that can devastate a company's reputation.

● Enforce "Day-One" Rights: They will be specifically looking for companies that aren't complying with the new 2026 rules for Statutory Sick Pay (where the three-day "waiting period" has been abolished).

The Three Biggest Risk Areas for 2026

Our team at CoreAcc Accountants has identified the three areas where SMEs are most likely to fall foul of the new agency:

1. Holiday Pay Calculations

Calculating holiday pay for staff with irregular hours or those who earn commission remains one of the most complex parts of UK payroll. The FWA will be looking for "underpayments" caused by businesses using simple 12.07% calculations that may no longer be compliant for certain staff types.

2. Minimum Wage "Tipped" Over the Edge

As the National Living Wage rises to £12.71 (for 21+), it is easier than ever to accidentally underpay staff. This often happens due to deductions for uniforms, tools, or even voluntary salary sacrifice schemes that take a worker's hourly rate below the legal floor.

3. Unpaid Working Time

Do your staff have to arrive 15 minutes early for a briefing? Do they stay late to cash up? If this time isn't paid, and it brings their average hourly rate below the minimum wage, the FWA can treat it as a serious breach.

How CoreAcc Accountants Can Help

The best way to deal with an FWA inspector is to ensure they find nothing wrong. CoreAcc Accountants provides a "shield" for your business through:

● Payroll Health Checks: We’ll review your current pay structures to ensure you aren't accidentally underpaying for holiday or travel time.

● Minimum Wage Audits: We check that salary sacrifice and other deductions aren't creating a compliance risk for your lower-paid workers.

● SSP Configuration: We ensure your payroll software is correctly set up for the "Day-One" sick pay rules starting in April 2026.

● Record-Keeping Support: We help you implement digital time-tracking that provides the "audit trail" the FWA expects to see.

Get in Touch

Don't wait for a knock on the door. Let CoreAcc Accountants ensure your payroll and employment practices are beyond reproach.

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