UK Proposes FWA-Led Holiday Pay Enforcement With 6-Year Lookback, 200% Penalties
In-house counsel overseeing UK workforces must prepare now, as a 2027 state enforcement regime will allow whole-workforce holiday pay investigations with 6-year lookbacks and penalties up to 200% of arrears, replacing most individual tribunal claims.
The UK government launched a June 30, 2026 consultation on the Fair Work Agency’s (FWA) new role enforcing statutory holiday pay and entitlement under the Working Time Regulations 1998, with enforcement set to begin in 2027. The FWA, a new state labor enforcement agency established in April 2026, will have power to investigate entire workforces (not just individual claims), review records going back 6 years, issue notices of underpayment, and impose civil penalties of 200% of arrears per worker (capped at £20,000, minimum £100) for non-compliance. The regime prioritizes employer compliance support, with full penalty waivers for employers who repay all arrears before an investigation starts. In-house counsel should audit current holiday pay arrangements for complex pay structures (irregular hours, variable pay, commission) and ensure 6-year detailed record retention ahead of the 2027 rollout.