Most rule changes for agencies arrive with a date attached. This one arrived quietly, as an update to a policy document, and it is worth more attention than its low profile suggests.
On 26 August the government updated the Fair Work Agency's enforcement policy statement. The headline for agency owners is not a new duty or a new deadline. It is about reach. The statement now spells out that the FWA protects vulnerable workers under modern slavery law, and that where serious labour exploitation falls short of the modern slavery threshold, it may prosecute under the Fraud Act 2006 instead.
Read that second part again, because it is the interesting bit. The regulator is telling you it has more than one legal route. If a situation is not "modern slavery" in the strict sense, that does not mean it is out of reach. That is a deliberate signal.
Why one regulator changes the maths
For years, the rules that touch recruitment agencies were enforced by different bodies. The Gangmasters and Labour Abuse Authority did one thing, HMRC's minimum wage team another, the Employment Agency Standards Inspectorate a third. They did not always join up. The practical effect was that good agencies carried the same paperwork burden as everyone else, while the worst operators sometimes slipped through the gaps between regulators.
The Fair Work Agency, live since April, pulls that together into one body. Last week's update shows that body is willing to reach for whichever law fits. For an agency that cuts corners, that is an uncomfortable direction. For an agency that does things properly and has watched cowboys undercut it on price, it is quietly good news.
What it does not mean
It does not mean ordinary, well-run agencies are targets. It is not a reason to panic, and anyone selling you an expensive emergency fix off the back of this is overselling it. The honest read is narrower and more useful. The risk that used to be spread thin across several regulators is now concentrated in one that is better resourced. That raises the value of two things you can control. Getting the basics right, and being able to show that you have.
Five checks worth doing this week
- Are your workers paid at least minimum wage for every hour, including the hours that are easy to miss such as travel between assignments and waiting time?
- Is holiday pay calculated correctly and actually paid?
- Are your Key Information Documents and contracts current?
- If you use umbrella companies, do you know they are paying workers correctly?
- Do you understand who really employs and pays every worker in your supply chain?
Five clean answers and you have very little to worry about. One "I am not sure" and you have found your job for this week.
And keep one eye on October
None of this happens in isolation. From 1 October the time limit for most tribunal claims doubles from three months to six, so a mistake made now can be raised for twice as long. From 30 October you must take all reasonable steps to prevent sexual harassment of your workers, including by third parties like clients and site staff. A quieter hiring market is the right time to get these in order, not the wrong one.
The full picture of what the FWA enforces, and what the wider remit means in practice, is in our guide: https://ior.org/fair-work-agency-explained
This blog is general information, not legal advice. Take advice from your own solicitor where a situation is complex or high-risk.
If you would like the checklists and current guidance to keep on top of all this, BIOR Agency Membership is built for exactly that. https://ior.org/agency-membership