The incoming head of the UK’s new employment enforcement body is under pressure to show that the agency will deliver meaningful change for exploited workers and businesses facing unfair competition.
The Fair Work Agency, announced as part of the Employment Rights Bill, is due to launch in April 2026 with a remit to crack down on underpayment, withheld holiday pay and other breaches of employment law.
While the government says the new agency will transform labour market enforcement, employer groups and campaigners have warned that without adequate powers and funding, it risks becoming yet another underpowered watchdog.
Several organisations have already called on the chair to prove from the outset that the Fair Work Agency can take action where others have failed.
The government announced on Tuesday that it had appointed Matthew Taylor, a policy chief under Tony Blair and author of the 2016 Taylor Review of modern working practices, to lead the agency.
He previously served as Director of Labour Market Enforcement and is currently chief executive of the NHS Confederation. He is expected to step down from that role ahead of the Fair Work Agency’s launch in April.
Mandate to tackle underpayment and withheld pay
The Department for Business and Trade said the new agency would bring together the functions of three existing bodies, including the Employment Agency Standards Inspectorate and HMRC’s minimum wage enforcement team, creating a single point of contact for both workers and employers.
It will be given powers to investigate non-compliance, conduct workplace inspections, issue civil penalties and bring legal proceedings on behalf of workers.
According to government estimates, nearly one million people in the UK have their holiday pay withheld each year, while around 20 percent of minimum wage workers are underpaid.
The agency is being tasked with addressing this “systemic problem” and ensuring that enforcement is no longer fragmented across multiple departments.
Business Secretary Peter Kyle said the current system did not work for workers or employers, and described the new body as a “game-changer” that would help ensure rights are properly enforced while supporting firms that comply with the law.
He added that the agency would be central to the government’s plan to “make work pay” and raise living standards.
Employment Rights Minister Kate Dearden said the new chair brought “extensive experience” to the role and would lead an agency “with the teeth to take action against businesses that flout the rules”.
She added that it was “about creating workplaces where people are treated with dignity and respect. It’s exactly the kind of backing working people in this country deserve”.
Support, but also early warnings
While the appointment has been broadly welcomed, campaigners say the real test will be how the agency operates in practice.
The charity Young Women’s Trust, which supports women aged 18 to 30 in low-paid and insecure work, has called for the agency’s leadership to actively engage with those most affected by poor employment practices.
The charity’s chief executive, Claire Reindorp, said young women were often unaware of their rights or felt ignored when they raised concerns.
She said the current system was failing one of the most vulnerable groups in the workforce, and urged the chair to ensure that their voices were reflected in the agency’s design and decision-making.
“We’re ready to welcome the new chair to this vital role and work alongside him to ensure the Fair Work Agency truly works for young women,” she said. “Our evidence shows that young women’s rights are routinely flouted by employers — being paid less than the minimum wage, facing discrimination and being paid less than male colleagues for the same work is all too common.
“We urge Matthew Taylor to make sure that the Fair Work Agency listens to young women and designs a system that meets their needs. We look forward to continuing these conversations with him in the coming months so that the Employment Rights Bill is as transformative as it promises to be.”
The Trades Union Congress has also backed the formation of a single enforcement body but said success would depend on whether the agency was properly funded and empowered to act.
General Secretary Paul Nowak said too many employers had been able to flout the law without consequences, and that workers and responsible businesses alike had paid the price.
“The Fair Work Agency is a vital opportunity to turn the page on the era of inadequate enforcement,” he said. “For too long, bad bosses have got away with flagrantly breaking the law. This isn’t right. It fails workers and the many decent employers who play by the rules.
“That’s why the Fair Work Agency is so important. It is a chance to create a properly resourced body with real teeth to help good employers comply with the law and come down hard on those who refuse to do right by their staff.”
Nowak said he “look[ed] forward to working with Matthew Taylor in his role as chair to realise the Agency’s full potential, protect workers in every corner of the country and work with unions to drive up the quality of work”.
Employer bodies call for clarity and balance
Business groups have broadly supported the agency’s creation but warned that a heavy-handed or unclear approach could add to uncertainty for employers.
The Recruitment and Employment Confederation said it was vital the new agency built on the expertise of existing bodies and struck the right balance between enforcement and support.
Chief executive Neil Carberry said the vast majority of businesses complied with employment law, often absorbing significant costs in the process, and should not be disadvantaged by those that cut corners.
He said the Fair Work Agency should be seen as a way to strengthen fair competition by making sure non-compliant firms face consequences.
The Chartered Institute of Personnel and Development (CIPD), the professional body for HR and people development, said the appointment of an experienced figure was an important step but stressed the need for employer input.
Chief executive Peter Cheese said businesses needed clear guidance, particularly smaller firms, and that employer voices should be part of shaping the agency from the outset.
“To ensure its success, the Fair Work Agency must be equipped with the right resources and a strong employer-side voice,” he said. “Employers — particularly smaller businesses — need clear guidance and support to comply with the new Employment Rights Bill. At the CIPD we look forward to working with the new chair to help the agency deliver on its ambition.”
A chance to reset the system
In his first comments since the appointment, the incoming chair said he had long argued for a single enforcement body and described the new agency as essential for protecting workers.
“For years inside and outside Government, I argued that employers and workers need a single enforcement body for employment rights,” he said. “It is an honour to be asked to be the first chair of the Fair Work Agency, the body that will meet that need.
“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.”
He will begin working with government, employer groups and unions over the coming months to help shape the agency’s structure and early strategy, before formally taking up the post ahead of the April 2026 launch.
The question now is whether the agency’s structure, remit and leadership will be enough to overcome the longstanding challenges it has been created to fix.
