The employment police have arrived. Most bosses have no idea, writes Daniel Barnett

On Tuesday, a new government agency quietly came into existence with the power to walk into any British workplace, demand to see your records, and fine you twice what you owe if they don’t like what they find.

Welcome to the Fair Work Agency: Labour’s new employment super-regulator, and the most significant change to employment law enforcement in a generation.

For thirty years, the enforcement model in this country has been essentially complaint-driven. A worker is underpaid, the worker complains, and the authorities investigate. The system depended almost entirely on workers being brave enough, or desperate enough, to come forward. Widespread non-compliance went quietly unpunished. Employers who knew their workers wouldn’t complain could take the risk.

That model is now dead.

The Fair Work Agency, which launched on 7 April, brings together three previously separate bodies (HMRC’s National Living Wage enforcement unit, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate) into a single regulator with dramatically expanded powers. It can now launch investigations on its own initiative, without a single worker having to raise their hand. It can recover up to six years of underpaid wages on a worker’s behalf. And it can impose financial penalties of up to 200 per cent of the sum owed.

Let me put that plainly. If the Fair Work Agency decides you’ve underpaid your staff, and the underpayment over six years amounts to £50,000, you face a penalty of £100,000 on top of repaying the £50,000 itself. That is a very large stick.

Here is what I want every small business owner to understand: this is not just about rogue gangmasters exploiting agricultural workers in the Fens, or labour abusers trafficking people into car washes. This agency has jurisdiction over every café that’s ever got holiday pay slightly wrong, every care home that’s ever rounded down a shift, every cleaning contractor that’s ever miscalculated minimum wage for employees on irregular hours. Hospitality, care, retail: these are the industries where wage non-compliance is commonplace, often unintentional, and now squarely in the crosshairs of a body that doesn’t need a victim to complain before it acts.

Most employers affected have no idea this has happened. The agency launched on a Tuesday in Easter week, sandwiched between bank holidays and overshadowed in the press by a Waitrose worker getting sacked for tackling a shoplifter. It barely made the news. And this is an extraordinary new body with extraordinary powers, including the legal ability to force their way into premises and arrest people.

That said, enforcement bodies are only as effective as their resources. The history of employment law enforcement in this country is littered with agencies announced with great fanfare, then quietly starved of the inspectors and technology they need. If the Fair Work Agency is to be more than a rebrand, it needs proper investment and a genuinely proactive inspections programme.

But assuming the government resources this body, the message to employers is simple: the age of hoping your workers won’t complain is over. Get your payroll right, get your holiday pay right, and get your records in order, because the knock on the door no longer requires anyone on the inside to have asked for it.

The employment police have arrived. Most of Britain’s bosses just haven’t been told.

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Daniel Barnett is the presenter of the LBC Legal Hour and a barrister at Outer Temple Chambers.

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