Holiday: New Duty to Keep Records

We are now officially in April, and along with longer days and brighter skies (hopefully), we expect to see the implementation of some of the measures from the Employment Rights Act 2025.

By now, most employers will be aware of some of the key changes. If not, a summary can be found here and here.

However, there is one change that might come as a surprise. The Government has very recently confirmed that a new duty to keep records of annual leave will take effect as soon as next week, on 6 April 2026. This had not been included in the implementation roadmap or updated timetable, so many businesses may not have been expecting it quite so soon.

What does this mean in practice? Many employers will already keep records of annual leave and holiday pay as a matter of good practice, although there has been no general legal requirement to do so for the most part. But from 6 April,  it becomes a legal obligation for employers to keep “adequate” records (for a period of 6 years) demonstrating compliance with annual leave entitlements and holiday pay requirements, including:

• Ordinary and additional annual leave
• Any leave carried forward from previous years
• How holiday pay has been calculated, including which elements of pay have been included or excluded
• Any payments made in lieu of annual leave, including for carried-over leave

There is currently no guidance on what sort of records might suffice, as long as it is created, maintained and kept in such a manner and format as the employer reasonably thinks fit. Essentially, employers will need to make a own judgement calls about how the information is kept.

Enforcement is expected fall under the remit of the new Fair Work Agency, which is due to be established on 7 April 2026. Although the agency will not have the authority to take enforcement action straight away, failure to comply with these new requirements will be a criminal offence, punishable by a fine. Enforcement action can be taken retrospectively, so it is best to have ensure compliance immediately.

If you have any questions about how these changes may affect your business, please don’t hesitate to contact Adele Martins at [email protected] or Nina Khuffash at [email protected].

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