Quick answer: Three things changed in April 2026 for any hotel, care home or nursery booking agency chefs and kitchen staff. The Fair Work Agency went live on 7 April 2026 under Part 5 of ERA 2025, consolidating the GLAA, EAS and NMW enforcement function under one brand with day-one document powers, civil penalties and Labour Market Enforcement Undertakings. The National Living Wage rose to £12.71 on 1 April 2026, on top of the April 2025 employer NIC step-up. ERA Phase 1 commenced on 6 April 2026: day-one paternity, day-one unpaid parental leave, and SSP from day one with no Lower Earnings Limit. The reforms most operators expect (six-month unfair-dismissal threshold, zero-hours guaranteed-hours, fire-and-rehire) are not yet in force; those land in 2027.
What actually changed on 6 and 7 April 2026
ERA 2025 commenced in tranches. Keep 6 April and 7 April separate.
On 6 April 2026 the substantive employment-rights changes took effect: day-one statutory paternity leave, day-one unpaid parental leave, stronger collective redundancy protective awards, stronger whistleblowing protection in relation to sexual harassment, and the SSP reforms removing both the three-day waiting period and the Lower Earnings Limit gateway. The umbrella-company joint and several liability rules under section 24 Finance Act 2026 also turned on for payments made on or after 6 April.
On 7 April 2026 the Fair Work Agency was established. The statutory authority sits in Part 5 of ERA 2025; section 90(1) gives the Secretary of State the function of enforcing the labour market legislation in Part 1 of Schedule 7. The agency combines the GLAA, the EAS Inspectorate, the NMW enforcement team and the Office of the Director of Labour Market Enforcement under one front door.
The NMW transfer is worth a note. Several legal advisories describe the FWA as having absorbed HMRC’s NMW function on 7 April 2026. The Strategic Steer is more cautious: NMW enforcement continues to be delivered by HMRC under a contracting arrangement during 2026/27, with full transfer in April 2027. The safer reading is that the public complaint route changed brand on 7 April, but HMRC’s NMW inspectors are still doing the underlying work.
The Fair Work Agency: powers on day one
Day-one powers are materially broader than the old siloed model. Section 96 ERA 2025 gives document powers, including the power to require a person “to provide specified information” or “specified documents.” Section 103 covers notices of underpayment, section 107 civil penalties, and sections 119 to 129 introduce Labour Market Enforcement Undertakings and Orders. The FWA published its Enforcement Policy Statement and a Code of Practice on LME Undertakings and Orders on launch day. The headline NMW penalty cap remains 200% of the underpayment per worker, capped at £20,000 per worker. Powers phased in later include the full operational transfer of NMW from HMRC, proactive holiday-pay enforcement, and the umbrella-company Conduct-Regulations regime, all in 2027.
On sector priorities, the UK Labour Market Enforcement Strategy 2025 to 2026 lists “agriculture, hand car washes, construction and adult social care” as high-priority sectors. Adult social care is named. Hospitality is identified more narrowly as a sector where risk arises specifically where housing is linked to employment, rather than as a named day-one priority. That is the framing a careful Registered Manager or HR director should plan against.
There is no brand-new standalone FWA director-disqualification regime starting on 7 April 2026. Existing routes still bite: section 31 of the NMW Act 1998 preserves the criminal offence where an employer “refuses or wilfully neglects” to pay NMW, and HMRC’s NMW manual confirms the Disqualification Unit may use NMW evidence in proceedings under the Company Directors Disqualification Act 1986. The FWA’s agency-regulation remit covers England, Wales and Scotland; in Northern Ireland, regulation continues with the Employment Agency Inspectorate.
The cost stack from 1 April 2026
The National Living Wage for workers aged 21+ rose to £12.71 an hour on 1 April 2026, a £0.50 (4.1%) uplift. The 18-20 rate rose to £10.85 (an 8.5% jump). The 16-17 rate and apprentice rate both rose to £8.00. The accommodation offset rose to £11.10 per day.
Layered on top is the April 2025 employer NIC reset. The secondary Class 1 rate rose from 13.8% to 15%; the secondary threshold fell from £9,100 to £5,000 a year. Both carry into 2026/27. Employment Allowance stays at £10,500 for eligible employers.
A 40-hour week at £12.71 over 52 weeks gives a worked direct-cost picture for one full-time role.
| Cost line | April 2025 (£12.21) | April 2026 (£12.71) | Change |
|---|---|---|---|
| Gross annual wage, 40h/week | £25,396.80 | £26,436.80 | +£1,040.00 |
| Employer NIC at 15% above £5,000 | £3,059.52 | £3,215.52 | +£156.00 |
| Total direct cost (wage + employer NIC) | £28,456.32 | £29,652.32 | +£1,196.00 |
That is a worked calculation from published HMRC and LPC numbers, not an HMRC worked example. Across a 50-strong kitchen and care brigade, the same line drags roughly £60,000 of statutory cost inflation through one year, before any commercial agency margin.
The trap is the gap between paying £12.71 on paper and complying in law. Required uniforms, mandatory training charged to the worker, and accommodation above £11.10 per day all reduce NMW pay. Travel between assignment sites counts as working time under regulation 34 of the NMW Regulations 2015. A care group running relief cooks across three homes the same morning, or a hotel group moving an agency chef from breakfast cover at one site to lunch at another, sits squarely inside the published priority list.
Employment Rights Act 2025: what is live, what is not
The reforms most operators expect are not yet in force. The commencement timetable, refreshed on 15 April 2026, places them in 2027.
Live as of 6 April 2026: day-one statutory paternity leave; day-one unpaid parental leave; SSP from day one with the three-day waiting period removed and the Lower Earnings Limit gateway abolished; stronger whistleblowing protection in relation to sexual harassment; stronger collective redundancy protective awards; simplified trade union recognition.
Not live yet: the unfair-dismissal qualifying period drop from two years to six months (section 25 amends section 108 ERA 1996; applies to dismissals from 1 January 2027); fire and rehire restrictions (section 28 inserts new section 104I, also from 1 January 2027); zero-hours guaranteed-hours, reasonable-notice-of-shifts, short-notice cancellation payments and the equivalent rights for agency workers under sections 1 to 4, all in 2027 with a 12-week reference period anticipated; electronic and workplace balloting (August 2026); duty to inform workers of the right to join a trade union and stronger union access rights (October 2026).
The day-one SSP change is the one most likely to bite hospitality and care payrolls before any FWA inspector arrives. Lower-paid agency kitchen porters, breakfast cooks and bank cooks who previously fell below the LEL are now SSP-eligible from the first day of sickness.
Umbrella companies and the agency supply chain
From 6 April 2026, section 24 of the Finance Act 2026 inserted a new Chapter 11 into Part 2 of ITEPA 2003, introducing joint and several liability for unpaid PAYE where an umbrella company sits in the labour supply chain. The rules apply to money paid to workers on or after 6 April. The Social Security Contributions (Umbrella Companies) Regulations 2026 came into force the same day, extending equivalent treatment to NIC.
Liability allocation under HMRC guidance is sequential. Where there is an agency between the end client and the umbrella, HMRC pursues the agency that holds the direct contract with the end client. Where there is no agency, the end client carries the liability. HMRC’s manual adds a connected-party trap: if the contracting agency and the umbrella are connected, the end client can become jointly and severally liable alongside both. The employment-law regulation of umbrellas under the Conduct Regulations 2003 is not live yet; that comes in 2027.
For practical due diligence in the meantime, HMRC says businesses should check Companies House filings, review payslips to confirm full PAYE is operated, check HMRC’s “named tax avoidance schemes” list and the stop-notice list, and be cautious about umbrellas offering unusual financial incentives. Accreditations such as FCSA or Professional Passport are examples of due-diligence measures, not a statutory safe harbour. At Chefs Bay we run a PAYE-only payroll and do not use umbrella intermediaries; that removes the supply-chain question from end clients before the contract starts. Our hire staff page sets out the engagement model in plain terms.
What hospitality and care employers should change now
There is no published FWA kitchen-inspection checklist. From the section 96 document powers, the Conduct Regulations 2003 KID regime and HMRC’s record-keeping rules, an inspector will look for worker identity and right-to-work evidence; Key Information Documents under regulation 13A; timesheets and digital time-and-attendance data; payslips with PAYE and NIC plainly visible; AWR parity comparator information for any agency worker past 12 weeks in the same role; six-year annual-leave records under the new ERA 2025 duty; umbrella supply-chain due diligence where used; and NMW records, including travel-between-assignments calculations where a chef covers multiple sites the same morning.
The KID is the front-end document that often reveals whether the supply chain is clean. Regulation 13A requires the rate, pay intervals, statutory deductions, other deductions, fees, benefits, holiday entitlement and a representative gross-to-net example, before terms are agreed. If your supplier cannot show you a KID for a chef on shift today, you have a problem before any inspector arrives.
The chef-specific overhead we keep on file per relief chef sits in DBS, allergen, food-safety and right-to-work documentation rather than headline rate. That is the same compliance overhead we wrote about in care home chef sickness cover, and it is what an inspection actually examines. The gap between an agency chef and a direct hire is not in margin; it is in evidence. Our DBS-checked kitchen staff standard sets out which checks we hold for which scope of work.
Four adjustments are reasonable to ask an incumbent supplier for in writing in the next 60 days. Ask for a sample KID for every chef on shift and reconcile the gross-to-net example to £12.71 above the accommodation offset and below uniform or training deductions. Ask whether the agency uses umbrella companies, name them, and check each against HMRC’s named tax avoidance schemes and stop-notice lists. Add a contractual right to audit payroll, KIDs, right-to-work evidence and AWR parity tracking. Verify AWR parity for any chef approaching 12 weeks in the same role with the same hirer; the Swedish Derogation has been gone since 6 April 2020.
When a hotel, care group or contract caterer engages Chefs Bay directly, the engagement is PAYE, chef paperwork is held centrally, and the supply chain is one link long. For care home buyers, our care home chef agency commitment covers DBS, IDDSI and allergen vetting before placement; the hospitality sector page and healthcare sector page cover the rate model. Real rates sit in our 2026 chef rates guide; procurement-team rules sit in contract catering PSL requirements; London buyers can find regional response framing on our London hotel and restaurant chef page. In central London with reasonable notice and a concentrated bench, we regularly confirm within 2 hours; that is why we wrote the 2-hour response guarantee the way we did. Short-notice rural call-outs realistically take up to 24 hours. To talk through your supply-chain risk before the next inspection cycle, contact us.
Frequently asked questions
Can the Fair Work Agency walk into my hotel or care home kitchen now?
Yes. From 7 April 2026 the FWA is the single labour-market enforcement body, backed by document powers in section 96 ERA 2025 and a published enforcement policy. Timesheets, pay records, KIDs, AWR comparator data and supply-chain documents should be inspection-ready.
Did unfair dismissal become a day-one right on 6 April 2026?
No. The 2025 Act reduces the qualifying period from two years to six months, applying to dismissals from 1 January 2027. As at 28 April 2026, ordinary unfair dismissal is still not a day-one right.
Do I have to pay agency chefs for cancelled shifts under the new rules already?
Not under the new zero-hours and short-notice cancellation package yet. Sections 1 to 4 of ERA 2025 create those rights, with a separate route for agency workers in section 4, but the timetable places them in 2027. Your existing supply contract may still create earlier liability.
Who is on the hook if an umbrella company in my supply chain does not pay PAYE?
From 6 April 2026, HMRC can pursue the agency that holds the direct contract with the end client, or the end client itself where there is no agency, under Chapter 11 of Part 2 ITEPA 2003. Where the contracting agency and umbrella are connected, the client can also be jointly and severally liable.
If I pay £12.71 an hour, am I automatically NMW-compliant?
No. Required uniform costs reduce NMW pay. Mandatory training charged to the worker can reduce NMW pay. Travel between assignment sites counts as working time under regulation 34 NMW Regulations 2015. Accommodation deductions above the £11.10 daily offset reduce NMW pay.
Who should do the right-to-work check on agency-supplied chefs?
Normally the agency, where the agency is the employer or engager. Home Office guidance also encourages users of supplied labour to verify that labour providers are running compliant checks, and in nurseries, schools and care homes the end client should require contractual evidence and audit rights regardless.
How long do I now need to keep holiday pay records for?
Six years. ERA 2025 introduced a new annual-leave records duty with a six-year retention period. NMW records created after 1 April 2021 must also be retained for six years.