Fair Work Agency: Small and Micro Businesses

Lord Londesborough Excerpts

Wednesday 17th December 2025 Lords Chamber

[Lord Leong (Lab)]

As I mentioned earlier, the intention is to have the secondary legislation in place and for this to be set up in April 2026. As for engagement with SMEs, we have stressed that there will be an advisory board within the Fair Work Agency made up of representatives from business organisations, big and small, trade unions and independent representatives so that they can feed in their concerns and so that the Fair Work Agency will be able to do its job.

[Lord Londesborough (CB)]

My Lords, the Minister just mentioned that as many as 400,000 workers are being paid under the minimum wage and another 900,000 are having their holiday pay withheld. Given the enormity of these numbers, how will the FWA be resourced to deal with the scale of its many responsibilities, particularly the delivery of an agile, fully-functioning and accurate database that has to cover more than 5 million businesses and 33 million workers to ensure that law-abiding businesses, particularly small and micro ones, are not unfairly targeted or indeed distracted from delivering growth?

[Lord Leong (Lab)]

The noble Lord is right to raise that concern, and I will set out the Government’s position. As I said earlier, the agency’s approach is proportionate and risk based. It does not create new obligations, and it consolidates existing rules into a clearer and simpler system. Micro-businesses up and down the country already comply with the minimum wage, holiday pay and sick pay, so there is no need for them to do anything else and they will see no changes to their day-to-day operation. Our focus is on serious or repeated abuse, not technical errors, and we will work with business groups to ensure that the transition is smooth and supportive for very small firms.