Matthew Taylor, a former policy chief for Tony Blair and Theresa May’s governments, has been appointed as the Chair of the newly created Fair Work Agency (“FWA”).
What is the Fair Work Agency?
The Fair Work Agency is a new UK Government body set to come into force in April 2026, which will be tasked with transforming how employment rights are enforced across the UK.
The FWA will bring together certain existing state enforcement functions, specifically the Gangmasters and Labour Abuse Authority (“GLAA”), the Employment Agency Standards Inspectorate (“EASI”) and HMRC’s National Minimum Wage Enforcement Team. The work that these bodies currently carry out will fall under the remit of the FWA. This integration aims to eliminate fragmented enforcement and create a single point of accountability for core employment standards.
Who is Matthew Taylor?
Matthew Taylor spearheaded the landmark Taylor Review of Modern Working Practices in 2016, a report that laid the groundwork for many of the sweeping changes to employment law now being considered and implemented through the Employment Rights Bill.
Since 2021, Taylor has held the position of Chief Executive at the NHS Confederation, following his leadership at the Royal Society of Arts and a term as interim Director of Labour Market Enforcement. These roles reflect his breadth of experience across policy, public service, and labour regulation, expertise which he now aims to bring to his new position with the Fair Work Agency.
When asked about his appointment, Taylor told the Department for Business and Trade: “The Agency has a vital job in strengthening labour market compliance and enforcement. This is essential to provide workers with protection and employers with a supportive and level playing field on which to invest and grow.”
What powers will the Fair Work Agency have?
The powers of the FWA will include the following:
- Powers to inspect workplaces and require employers to produce relevant documents and evidence of compliance with employment law.
- Powers to enforce failures to pay statutory payments to workers, such as holiday pay and statutory sick pay.
- Enhanced powers to issue Notices of Underpayment, not just in respect of NMW breaches but other statutory payments as well.
- The power to bring Employment Tribunal proceedings on a worker’s behalf, even if the worker does not want to purse a claim themselves.
- Cost recovery – the FWA will be able to impose charges to recover enforcement costs from employers for non-compliance.
What’s new?
In addition to consolidating certain existing Government bodies, the FWA will have additional new powers, such as enforcing workers’ rights to holiday pay. An estimated 900,000 workers have their holiday pay withheld each year, but as things stand currently, if an employer underpays (or fails to pay) holiday pay, this can only be addressed by the worker bringing an Employment Tribunal claim. From April 2026, the FWA will have the power to investigate and take action against such employers of its own volition, in a similar way to NMW enforcement. It is proposed that the FWA will be able to impose penalties of up to 200% of any holiday pay underpayments identified.
Next Steps
With the FWA set to launch in April 2026, businesses should expect increased scrutiny, especially around statutory payments and complex holiday pay rules. Employers and agencies should proactively audit their policies and processes to ensure compliance ahead of April 2026. This includes conducting thorough audits, making any necessary back payments, and updating systems or working arrangements to ensure future compliance. Failing to act now could expose employers to substantial financial and legal consequences once Matthew Taylor takes the helm.
