Payroll and the Fair Work Authority: What You Need to Know for 2026

Starting in 2026, the UK is ushering in a landmark shift in employment rights enforcement with the introduction of the Fair Work Authority (FWA) – a single, powerful agency combining the responsibilities of several existing bodies.

This is more than just a reshuffle of regulators. It’s a fundamental change in how businesses will be held accountable for getting pay and working conditions right.

At TCW, we know that payroll is at the frontline of employment law compliance. So what does this new enforcement model mean for you – and how can your business be ready?

What Is the Fair Work Authority?

The FWA is designed to simplify and strengthen enforcement of workers’ rights. It will:

• Replace multiple enforcement bodies (like HMRC’s National Minimum Wage team, the Gangmasters and Labour Abuse Authority, and parts of BEIS)

• Have new powers to inspect, investigate, and take action

• Bring together voices from business, unions, and independent experts through a social partnership advisory board

• Focus on supporting good employers – and holding bad actors to account

What Will This Mean for Payroll?

1. More Scrutiny on Pay Practices

With stronger enforcement powers, payroll accuracy becomes non-negotiable. Expect:

• Greater focus on holiday pay compliance, especially for variable-hour or commission-based roles

• Tougher checks on minimum wage errors, including unpaid work time, deductions, and salary sacrifice issues

• An increased need for clean, auditable records that prove your processes are fair and legal

2. Simpler but Stricter Compliance

While the new system reduces confusion by creating a single point of contact, it also means:

• Clearer rules – with real consequences for getting them wrong

• Fewer excuses for non-compliance

• A need to standardise payroll practices across all departments and providers

3. Greater Accountability Across the Supply Chain

If you use contractors, umbrella companies, or outsourced payroll:

• You may be held jointly responsible for breaches in your supply chain

• You’ll need to audit your providers and review contracts to ensure they meet employment rights standards

4. More Visibility for Good Employers

The FWA isn’t just about enforcement – it’s also about fairness. Compliant businesses may benefit from:

• Access to guidance, support, and possible public recognition

• Opportunities to help shape best practice

• A more level playing field where exploitative competitors are tackled

How to Prepare Now

2026 might feel like a while away, but preparation starts today. Here’s how payroll teams and employers can get ahead:

• Review your current processes – Are you confident your holiday pay, deductions, and salary records stand up to inspection?

• Upskill your payroll team – Employment rights enforcement is changing. Make sure your team understands how.

• Check your supply chain – Are your contractors and umbrella companies compliant?

• Build an audit trail – Start documenting your compliance now. Transparency will be key.

How TCW Can Help

At TCW Accounting and Training Solutions, we offer more than just payroll processing. We provide:

• Compliance audits tailored to your business

• Training for in-house teams on the new enforcement model

• Support for onboarding and reviewing third-party payroll providers

• Holiday pay and minimum wage health checks

We’re here to make sure you’re not just compliant, but confident.

Let’s Make Work, Work

2026 is the beginning of a fairer framework – but only if you’re ready. Let’s make it fair. Let’s make it work. And if you’re not sure where to start, TCW is here to walk you through every step.

Get in touch today to futureproof your payroll before the Fair Work Authority comes into force.