Could Your Business Be Breaching Workers' Rights?

Andrew Weir • August 24, 2026

New research has found that 5.6 million UK workers have experienced a clear breach of their basic employment rights in the past two years.

In most cases, not because employers deliberately broke the law. Because they did not know their obligations, or simply had no proper systems in place to check.

That distinction matters a lot less than it used to. With the Fair Work Agency now operational, ignorance is no longer a defensible position.


What is actually at stake

If your business breaches basic employment rights, the consequences can be significant.

You could be ordered to pay back everything you owe, going back years. A worker can bring a tribunal claim without needing a lawyer. And the Fair Work Agency can audit your records, issue financial penalties and publicly name employers who fall short.

There is also the damage you will not see on a balance sheet. If your staff discover their rights have been breached, even accidentally, that breaks trust. And rebuilding trust is considerably harder than getting the paperwork right in the first place.


What the research found

The most common violations were straightforward ones. Being paid below the National Minimum Wage. Not receiving payslips. Not being given legally required employment documents.

Workers in insecure or low-paid roles were hit hardest. More than 25% of people in low-income, non-traditional or minority background roles reported a breach.

And 37.5% of the workforce reported negative mental health as a harmful practice they had experienced at work.


Why small businesses are particularly exposed

If you manage HR informally, you are more likely to be in breach of something than you probably realise.

The patterns we see most often in smaller businesses are verbal agreements instead of written contracts, payroll that has never been properly checked against minimum wage rules, and long-serving employees who have never been given a proper written statement of employment.

None of that comes from bad intent. It comes from a business growing faster than its processes.


The five areas that trip employers up most

National Minimum Wage. Tips, commission or deductions can push effective pay below the legal minimum without you realising. The calculation is more specific than most employers expect.

Payslips. Since 2019, every worker has had the right to a payslip, not just employees. If you have people working for you who are not on the payroll in the traditional sense, this still applies to them.

Written statements of employment. This is a day one right. The written statement must be provided on or before the first day of employment, not at the end of a probation period.

Holiday pay. If your workers have irregular hours, calculating holiday pay correctly is far more complicated than dividing annual leave by twelve months. This remains one of the most misunderstood areas of employment law.

Working time. Rest breaks and the 48-hour weekly limit still apply even where workers have signed an opt-out agreement. The opt-out covers the hours limit, not the right to rest breaks.


The Fair Work Agency is already active

The FWA is now operational and taking action to protect workers' rights.

It can conduct proactive inspections and audits unannounced, without needing an employee complaint first. It can bring claims on behalf of workers, issue financial penalties and back payment orders and, in serious cases, publicly name employers who fall short.

That last point is worth sitting with. The reputational cost of being named can outlast the financial penalty by years.


Where to start

Begin with a basic compliance audit. Work through your key obligations and check whether your records, documents and processes actually hold up under scrutiny.

Ask yourself:

  • Are your written employment statements in place and up to date?
  • Are payslips being issued to everyone entitled to them?
  • Are you confident your minimum wage calculations are correct, including for tipped or commission-based staff?
  • Are your holiday pay calculations right for all workers, including those on irregular hours?

If the answer to any of those is "I am not sure", now is the time to find out properly.


How we can help

We carry out compliance audits of employment practices, identify gaps before they become enforcement issues and help you put the right systems and documentation in place.

If you are not confident your basics are covered, get in touch. A short review now costs far less than an FWA investigation later.



Get in touch for a confidential chat today.

📞 0161 757 7576
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info@hrtoolbox.co.uk
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www.hrtoolbox.co.uk

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