New Holiday Record-Keeping Duties: What Employers Must Do from April 2026

One of the most significant, and least discussed, changes introduced by the Employment Rights Act 2025 is the new statutory duty on all employers to maintain detailed records of worker annual leave and holiday pay. This new obligation affects all employers, regardless of workforce size or sector, and comes into effect on 6 April 2026. This article explains how the duty works in practice, what the process requires of employers, and what the consequences are for businesses that fail to engage.

What This Means for Employers

From 6 April 2026, all employers must retain 'adequate' records demonstrating compliance with annual leave and holiday pay obligations for a minimum of six years. This obligation is not advisory. It is a standalone statutory requirement introduced by the Employment Rights Act 2025, distinct from any pre-existing best-practice guidance.

The duty applies to all workers, including those on zero-hours contracts, part-year arrangements and any individual who falls within the statutory definition of 'worker'. Businesses cannot limit their obligations to permanent employees alone.

 1. What Records Must Employers Retain Under the Employment Rights Act 2025?  

Employers must be able to produce evidence of compliance across three categories, each carrying its own evidential requirements under the Working Time Regulations.

• Statutory entitlements: retain records of both the standard 4 weeks and the additional 1.6 weeks of annual leave for each worker.
• Holiday pay calculations: retain evidence of how pay was calculated, including where variable elements such as commission, overtime or bonuses form part of a worker's normal remuneration.
• Carry-over and termination payments: retain records of leave carried forward between leave years and any payments made in lieu of untaken leave upon termination.

All three categories must be covered for records to satisfy the 'adequate' standard required by the Act.

 2. How Long Must Holiday Records Be Kept from April 2026? 

The statutory minimum retention period is six years from the date each record is created. This creates a direct conflict for many employers whose HR or payroll systems are currently configured to delete personal data on shorter cycles to meet GDPR data minimisation obligations.

• Audit all HR and payroll platforms against their current data deletion and archiving schedules.
• Identify where GDPR-driven deletion cycles fall below six years for holiday-related data.
• Reconfigure systems to retain holiday records for the statutory minimum period.
• Document the legal basis for extended retention to satisfy both the Employment Rights Act 2025 and UK GDPR simultaneously.

Failure to carry out this review before 6 April 2026 risks inadvertent deletion of records that are now legally required to be maintained.

 3. Fair Work Agency Enforcement: What Employers Need to Know  

The Fair Work Agency becomes operational on 7 April 2026 and will be responsible for enforcing employment rights compliance, including the new record-keeping duty. Failure to comply constitutes a criminal offence punishable by an unlimited fine.

• Expect proactive enforcement. The Fair Work Agency is anticipated to conduct inspections without a prior complaint being raised.
• Await and implement Fair Work Agency guidance on the required format and content of records once published.
• Do not delay implementation pending publication of guidance. The statutory duty takes effect regardless.

The criminal nature of non-compliance means businesses cannot treat this obligation as a civil employment matter alone.

 4. Practical Steps Employers Should Take Before 6 April 2026  

Employers should act now to ensure systems, policies, and internal processes are ready before the implementation date.

• Audit HR and payroll systems to confirm holiday data can be stored and retrieved for a minimum of six years.
• Review how variable pay elements are recorded and ensure they are clearly linked to each worker's holiday pay calculations.
• Transition away from manual spreadsheets to a digital system capable of generating a clear, retrievable audit trail.
• Retain records of communications sent to workers reminding them to take their annual leave, as evidence the business has not prevented workers from doing so.

Businesses that act now reduce the risk of enforcement action and are better placed to demonstrate compliance from the outset.

Why This Matters in Practice

• Criminal liability: non-compliance is a criminal offence, not a civil employment dispute.
• Unlimited fines: there is no financial cap on the penalty for failure to maintain adequate records.
• Proactive enforcement: the Fair Work Agency is anticipated to inspect without requiring a prior worker complaint.
• GDPR conflict: systems configured for short-cycle data deletion may now be inadvertently non-compliant with employment law.
• Variable pay exposure: businesses with commission or overtime structures face a greater evidential burden.
• All worker types in scope: the duty extends to zero-hours and part-year workers, not only permanent employees.

Why Work with a Specialist Lawyer

The intersection of the Employment Rights Act 2025, UK GDPR, and the Working Time Regulations requires specialist legal advice to navigate correctly. A specialist employment lawyer can assist with:

• Reviewing current record-keeping practices against the new statutory standard.
• Updating data retention policies to satisfy both employment law and data protection requirements.
• Advising on how variable pay elements must be evidenced for holiday pay compliance.
• Preparing documentation to demonstrate compliance readiness for Fair Work Agency inspection.
• Reducing criminal liability exposure by ensuring full implementation before 6 April 2026.

Next Step

Businesses should be aware of the new holiday record-keeping duty and begin preparing now. Ensuring you are ready to maintain adequate records of annual leave and holiday pay for all workers is not optional; it is a legal obligation that takes effect on 6 April 2026.  

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