If you run a branch placing office temps, warehouse pickers or IT contractors, the body that can walk into your office and ask for your files changed name this year. The Fair Work Agency was set up on 7 April 2026 and took over the work of the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority and the Director of Labour Market Enforcement (GOV.UK, Fair Work Agency delivery plan 2026 to 2027). Most of the rules it enforces against agencies are old ones. What is new is a single body with more data, a bigger remit and a public plan for how it will use them. This is what a Fair Work Agency visit would test, and what to put right before one happens.
What the Fair Work Agency actually covers for agencies
For an employment business the core rulebook is still the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003. The difference is who holds the file. The agency also has statutory responsibility for National Minimum Wage enforcement. HMRC carries on doing that work under contract until April 2027, when around 500 HMRC staff move across.
The first delivery plan, published on 21 August 2026, says the agency will publish fresh guidance on the Conduct Regulations and will build its enforcement around data and risk. In practice that means complaints, payroll information and patterns across a sector will decide who gets looked at. An agency with a clean record and tidy paperwork has little to fear. An agency that cannot produce a signed set of terms for a temp it placed last spring has a problem it can fix this week.
The paperwork an inspector asks for first
Start with the work seeker side. Every temp should have agreed written terms with you before you find them work (regulation 14 of the Conduct Regulations), and every temp should have had a Key Information Document before those terms were agreed (regulation 13A, in force since April 2020). Pull ten files at random across your desks and check both are there, dated and in the right order. Warehouse volume desks are where this most often slips, because a busy Sunday night can see people start on a verbal yes.
Then the client side. Regulation 17 requires terms agreed with the hirer before you supply anyone, including any transfer fee. If a client signed your terms two years ago and the rates have since changed by email, make sure the current version is the one on file. Our guide to agency charge rates sets out what a client should see in those terms.
Third, the checks on the person. Regulation 19 says you must confirm the worker’s identity and that they have the experience, training and qualifications the client says it needs. For an IT contractor that might be a certification the client named. For an office temp handling payroll it might be references covering the last two roles. Keep a note of what the client asked for and what you checked against it.
Records under regulation 29 must be kept for at least a year from when they were made, and for a year after you last supplied that worker. Many agencies keep them longer for insurance and tax reasons, which does no harm.
Holiday records are now a criminal matter
Since 6 April 2026 employers have had to keep adequate records showing they comply with paid holiday rights under the Working Time Regulations 1998, and to keep them for six years. Failing to do so is a criminal offence punishable by a fine. For an employment business paying temps through PAYE, that means a record of each worker’s leave entitlement, leave taken, any leave carried over and how holiday pay was worked out, including which elements of pay went into it.
Holiday pay enforcement by the Fair Work Agency is expected to start in 2027. The government consulted until 22 September 2026 on a penalty of 200 percent of the underpayment, capped at £20,000 per worker, halved if paid within 14 days, with naming for employers who underpay. Those figures are proposals until regulations are made. The records duty is already law, so the time to check your payroll system can produce a six year holiday history for any temp is now.
Umbrella companies sit with you now
From 6 April 2026 an agency that supplies a worker paid through an umbrella company is jointly liable for any PAYE and National Insurance the umbrella fails to pay over to HMRC. Where there is no agency, the client carries it. For IT and office contractors this is where most of the money risk now sits.
Separately, the government has said umbrella companies will be brought inside the employment agency rules, with a consultation on how, and the change is expected during 2027. Until then, the sensible step is a short approved list of umbrellas you have checked, a review of their payslips against the Key Information Document you gave the worker, and a clear note in each file of who pays the temp.
What a serious failure costs
Breaching the Conduct Regulations is a criminal offence under section 5 of the 1973 Act, and an employment tribunal can make an order under section 3A of the 1973 Act banning a person from running an agency for up to ten years. Charging a work seeker a fee for finding them work remains unlawful under section 6. Those powers are not new, but they now sit with a body that also holds minimum wage data and plans to publish guidance on what it expects.
None of this asks much of an agency that already works properly. A morning spent on ten sample files, one call to payroll about holiday records and one list of approved umbrellas will cover most of what an inspector looks at first. If you place agency workers beyond twelve weeks, it is also worth rereading the Agency Workers Regulations 12 week rule, because equal treatment claims tend to surface during the same review.
Flamingo Workforce supplies office, warehouse, IT and healthcare staff across the UK with the compliance file shared before a first shift. If you need cover or want to talk through how we work, use the enquiry form and we will be in touch.