In brief. A recruitment agency is ready for a Fair Work Agency inspection when it can produce, inside two business days, the records the regulator is entitled to ask for, and they all tell the same story. Written terms with every work-seeker dated before any work-finding began, a Key Information Document for every agency worker, adverts that describe real vacancies, pay records that show the minimum wage for every hour worked, holiday records, right to work checks with their dates, and due diligence on every umbrella in the payroll chain. The Fair Work Agency has regulated employment agencies and employment businesses in England, Wales and Scotland since 7 April 2026, and its inspectors can issue warnings, recommend prosecution or seek a prohibition order through an employment tribunal. The twelve points below turn that into a 30-minute self-audit. Score each one yes, partly or no. Anything short of a clean yes is the action list, and four or more noes make readiness a board item this month.
Updated 8 October 2026. Rewritten with the question first and a government source for every point. The six-month tribunal time limit has been in force since 1 October 2026, the harassment duty arrives on 30 October 2026 and the dismissal changes on 1 January 2027, all taken from the government's timetable of 25 September 2026. Previously updated 28 July 2026.
Key facts, each with its source
- The regulator. The Fair Work Agency launched on 7 April 2026 and took over the Employment Agency Standards Inspectorate's regulation of employment agencies and employment businesses, alongside minimum wage enforcement and gangmaster licensing (business.gov.uk, Fair Work Agency; gov.uk, Plan to Make Work Pay and Employment Rights Act timeline update, 25 September 2026).
- The conduct rules. An agency or employment business cannot charge a work-seeker for finding them work, must give every work-seeker written terms and, for agency workers, a Key Information Document before it starts looking for work for them, and an employment business must pay a temporary worker for all the hours worked even if the hirer has not paid or has not authorised the timesheet (gov.uk, Employment agencies and businesses).
- The records and the two-day rule. Records of applications from work-seekers and hirers must be kept for at least a year from the last service provided to them, and when a Fair Work Agency inspector asks for records they must be provided by the end of the second business day after the request (gov.uk, Record keeping for employment agencies and businesses).
- Umbrella PAYE since 6 April 2026. The agency that holds the client contract is jointly and severally liable with the umbrella for the PAYE on every umbrella-employed worker it supplies, for money paid on or after 6 April 2026, in new and existing chains (HMRC, PAYE rules for labour supply chains that include umbrella companies from 6 April 2026).
- Sick pay and day-one leave since 6 April 2026. Statutory Sick Pay no longer has a lower earnings limit or waiting days, and paternity leave and unpaid parental leave are day-one rights (gov.uk timeline update, the 6 April 2026 measures).
- The six-month time limit since 1 October 2026. The time limit for bringing a claim to an employment tribunal has increased from three months to six, with breach of contract claims in Scotland following on 9 November 2026 (gov.uk timeline update, the 1 October 2026 measures).
- Harassment from 30 October 2026. Employers must take all reasonable steps to prevent sexual harassment of their employees and must not permit harassment of their employees by third parties (gov.uk timeline update, the 30 October 2026 measures).
- Dismissal from 1 January 2027. The qualifying period for unfair dismissal falls to six months for dismissals from 1 January 2027, and the compensatory award is uncapped (gov.uk timeline update, the January 2027 measures).
- Holiday pay enforcement from 2027. The Fair Work Agency will enforce statutory holiday pay from 2027 and not before April 2027, and since 6 April 2026 employers must keep annual leave and holiday pay records for six years (business.gov.uk; Acas, Employment Rights Act 2025).
- Still to be dated. Regulation of umbrella companies and the right to guaranteed hours both sit in the government's list for 2027, with the guaranteed hours timing to be updated after consultation (gov.uk timeline update, the 2027 measures).
The 12-point check
Score each point yes, partly or no, and write the evidence beside it, the document's name and where it lives. A point is a yes only when the document exists, carries a date, and could be handed to an inspector by the end of the second business day.
- Named owner. One named person owns employment-rights compliance and it is written down, in a job description or a board minute, not assumed.
- Terms with work-seekers. Written terms of engagement for permanent candidates and for temporary workers, issued before any work-finding service began, current, and matching how the desk actually operates.
- Key Information Documents. Every agency worker received a Key Information Document before terms were agreed, issued by you and not by the umbrella, with the pay illustration through any umbrella in the chain, and reissued when anything significant changed.
- Advertising accuracy. Every live advert names the agency and describes a genuine, current vacancy with accurate terms, and adverts for filled or expired roles come down.
- Fees and transparency. No fee is charged to a work-seeker for work-finding services, and the fees and transfer fees charged to hirers are set out in written terms agreed before the introduction or supply.
- Payroll chain due diligence. You can name every umbrella and intermediary in every chain, you hold dated due diligence on each, and the file would stand up to HMRC tomorrow, because since 6 April 2026 the umbrella's unpaid PAYE can be yours.
- Pay records. Every temporary worker has been paid for every hour worked, at or above the minimum wage, whether or not the hirer has paid you, and you can produce one worker's hours and pay for one pay period as a single document on request.
- Sick pay and holiday. Statutory Sick Pay runs from day one with no lower earnings limit and your charge rates reflect it, and annual leave and holiday pay records are kept for six years, with rolled-up holiday pay shown as its own line on the payslip where you use it.
- Right to work. A right to work check, with its date, for everyone on assignment, and a repeat check diarised where the permission is time-limited.
- Harassment duty. You have assessed harassment risk by site type for the workers you place, including from a client's staff and customers, workers are told at onboarding how to report to you directly, your client terms allocate responsibility for it, and the file is ready for 30 October 2026.
- Documentation that lasts. Client briefs, candidate consents, CV submission permissions, timesheets, complaints and the reason an assignment ended are documented end to end, retrievable within a day, and kept long enough for a claim that can now arrive six months after the event.
- The 2027 plan. You know which of your own staff will have six months' service on 1 January 2027, your probation and review paperwork is fit for the new qualifying period, you can brief clients on theirs, and someone is watching for the dates on umbrella regulation and guaranteed hours. The Employment Rights Act timeline has every date.
What an inspector asks for first
Six things, in the order an inspector would ask for them. Written terms with every work-seeker, dated before any work-finding service. A Key Information Document for every agency worker, including the umbrella illustration where one is used, given before terms were agreed. Right to work checks completed and dated for everyone on assignment. Pay records that show every hour paid at the minimum wage or above. Holiday records for six years, with rolled-up holiday pay shown as its own line where you use it. And due diligence on every umbrella or intermediary in the payroll chain. If you can put your hand on those six inside two business days, an inspection is paperwork. If you cannot, that is the list to work through this month.
What happens when the records are not there
An inspector who finds the rules broken can send a warning, recommend that the business is taken to court, or seek a prohibition order through an employment tribunal, which can bar a person from running an agency or employment business for up to ten years. Minimum wage underpayment is also named in public. On 3 September 2026 the government named around 660 employers for failing to pay the minimum wage, with about £4 million repaid to more than 27,000 workers and £7 million in penalties, and the list included businesses that supply staff. Since 1 October 2026 a worker has six months rather than three to bring most tribunal claims, so a file that would have been safe to thin after a quiet quarter now has to last twice as long.
Questions people ask
What does the Fair Work Agency check at a recruitment agency?
The conduct rules for employment agencies and employment businesses, which means written terms, Key Information Documents, adverts, fees and the records behind them, together with minimum wage pay for the workers the agency supplies. The same body enforces the minimum wage and, from 2027, statutory holiday pay, so a complaint about one temp's pay can open a look at the Key Information Documents and the umbrella chain as well.
How quickly must an agency produce its records to an inspector?
By the end of the second business day after the request. Records requested on a Monday are due by the end of Wednesday. Records of applications from work-seekers and hirers must be kept for at least a year from the last service provided to them, and electronic records are fine as long as they can be reproduced and read easily. Source, gov.uk, record keeping for employment agencies and businesses.
Can a temp claim against the agency for harassment by a client's staff?
From 30 October 2026 employers must not permit the harassment of their employees by third parties and must take all reasonable steps to prevent sexual harassment. For a worker an employment business engages under a contract to do the work personally, the client's staff and customers are third parties to the agency, so the agency needs its own risk assessment, reporting route and client terms. The disputes and tribunals guide sets out what a tribunal looks at.
What changes for recruitment agencies on 1 January 2027?
The qualifying period for unfair dismissal falls to six months for dismissals from 1 January 2027 and the compensatory award is uncapped. For an agency that reaches its own consultants and any temporary workers it employs directly, and every client will be asking about its own staff, so the probation and review paperwork needs to be ready before the date, not after it.
If more than four points score no, where should an agency start?
Pay records first, because minimum wage underpayment is what the government names employers for, then the written terms and the Key Information Documents, because the conduct rules require both before any work-finding service begins. Umbrella due diligence comes next, since the agency has carried the umbrella's PAYE risk since 6 April 2026.
Sources
Fair Work Agency (business.gov.uk). Plan to Make Work Pay and Employment Rights Act, timeline update (gov.uk, updated 25 September 2026). Employment agencies and businesses (gov.uk). Record keeping for employment agencies and businesses (gov.uk). PAYE rules for labour supply chains that include umbrella companies from 6 April 2026 (HM Revenue and Customs, gov.uk). Nearly 660 employers announced as failing to pay the minimum wage (gov.uk news, 3 September 2026). Employment Rights Act 2025 (Acas). The Conduct of Employment Agencies and Employment Businesses Regulations 2003 (legislation.gov.uk).
This guide is general information, not legal advice. Members should have their own terms, documents and processes checked by their own solicitor before relying on them, and BIOR accepts no responsibility for any loss arising from their use.
For members
The documents behind the twelve points sit in the BIOR Agency Compliance Pack in the member library, the terms of engagement templates, the Key Information Document template, the payroll chain due diligence log, the harassment clauses for client terms and the Fair Work Agency audit workbook, with Ask BIOR for the question the checklist raises. The Fair Work Agency guide, the umbrella guide and the Key Information Document guide sit beside this page on the hub. Every BIOR member is bound by the Code of Professional and Ethical Conduct, which includes an express duty to co-operate with the Fair Work Agency. BIOR membership includes the certification assessment. Pass it and you are certified for five years. See Agency Membership. Check any recruiter at ior.org/certified.
Written by The BIOR Membership Team. Last reviewed 8 October 2026 against gov.uk, business.gov.uk and legislation.gov.uk.