Fair Work Agency Calls on Employers to Self-Report Compliance Failures
- 4 Min Read
The UK’s Fair Work Agency is urging employers to identify and self-report employment law breaches before inspectors intervene. New research from Employment Hero also reveals growing concern among SMEs about complying with the Employment Rights Act, with many delaying hiring and reviewing workforce strategies as employment reforms accelerate.
- Author: HRD Connect
- Date published: Jun 26, 2026
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The UK’s Fair Work Agency has urged employers to identify and report employment law breaches before inspectors uncover them, signalling a collaborative approach to enforcement as the Employment Rights Act reforms continue to reshape the regulatory landscape.
The guidance follows new research from Employment Hero, which found that many SMEs are struggling to keep pace with changing employment legislation. The findings, alongside comments from Fair Work Agency Chief Executive Lisa Pinney MBE, were published in an Employment Hero briefing on the agency’s evolving approach to enforcement. You can read the full announcement here: https://employmenthero.com/uk/news/fair-work-agency-uk-employers/.
Speaking on the Inside the Workroom podcast with Kevin Fitzgerald, UK Managing Director of Employment Hero, Lisa said the agency wants to work alongside organisations that are committed to meeting their legal obligations.
“Everybody makes mistakes. If you find a problem, put it right and let us know. We want to work with legitimate businesses that want to do the right thing.”
The comments provide one of the clearest indications to date of how the Fair Work Agency intends to exercise its expanding enforcement powers.
Compliance concerns are reshaping workforce strategy
Employment Hero’s latest research highlights the scale of employer uncertainty surrounding the Employment Rights Act.
More than half (53%) of SME leaders said they are concerned about unintentionally breaching new employment legislation, while 44% reported freezing or slowing recruitment because of the reforms. One in four organisations also said they are increasing their use of contractors and freelancers to reduce the obligations associated with permanent employment.
The findings suggest that employment law reform is influencing business strategy as well as compliance. Employers are reassessing hiring models, workforce structures and operational risk as the regulatory environment evolves.
A collaborative approach to enforcement
Lisa emphasised that the Fair Work Agency intends to distinguish between employers that proactively address compliance issues and those that fail to do so.
“Where businesses do come forward, the agency works with them.”
“Those that don’t, and are subsequently found to be significantly non-compliant, face follow-up inspections and enforcement action.”
She explained that this approach already applies to National Minimum Wage and employment agency enforcement and is expected to extend to areas including holiday pay and Statutory Sick Pay as the agency’s remit expands.
The approach reflects a broader regulatory focus on encouraging early intervention and voluntary compliance rather than relying solely on formal enforcement activity.
Employment reforms are accelerating
The Fair Work Agency is expected to play a central role as further Employment Rights Act measures come into force over the next two years.
Upcoming reforms include changes to unfair dismissal protections from January 2027, alongside new requirements covering zero-hours contracts, shift notice rights and collective redundancy consultation.
For many organisations, these developments will require a comprehensive review of employment contracts, workplace policies, manager guidance and compliance processes.
Lisa believes much of the concern stems from uncertainty rather than widespread non-compliance.
“A lot of these are things that have been the right things to do for a while. They’ve just got more powers, more teeth.”
Her advice to employers is straightforward.
“Ensure that your policies and procedures are up to date. Make sure that your employees are receiving the pay and conditions they’re entitled to.”
Technology will become a key compliance tool
Alongside its expanding enforcement responsibilities, the Fair Work Agency is investing in digital capability, including a planned innovation hub that will explore how technology can improve compliance guidance and support enforcement activity.
Lisa also stressed that compliance systems do not need to be unnecessarily complex.
“Records don’t have to be complex. They should be proportionate to the size of your business.”
The agency has encouraged organisations to use digital HR systems and AI to strengthen compliance processes while maintaining appropriate human oversight.
As employment regulation becomes more complex, technology is likely to play an increasingly important role in workforce management, record keeping and demonstrating legal compliance.
Compliance is becoming a strategic HR capability
The Employment Rights Act reforms are redefining how organisations approach employment compliance.
Rather than treating compliance as a periodic legal exercise, organisations are increasingly embedding it within everyday HR operations through stronger governance, better manager capability, more robust policies and improved workforce data.
The Fair Work Agency’s latest guidance reinforces the value of proactive compliance. Organisations that identify issues early, address them promptly and maintain clear employment practices are likely to be better placed as the UK’s employment framework continues to evolve.
For HR leaders, compliance is becoming more than a legal requirement. It is an organisational capability that underpins workforce resilience, operational effectiveness and employee trust.
