Employment Rights Act 2025 and Holiday Records

13 May 2026

A significant change to UK employment law has now taken effect, and it’s one employers might not be aware of. From 6 April 2026, under the Employment Rights Act 2025, all employers are legally required to keep detailed records of employee holiday and holiday pay for a minimum of six years.

While many organisations already track annual leave in some form, this new requirement goes much further. It introduces a clear legal duty to maintain “adequate” records, and failure to do so could result in serious consequences. The Employment Rights Act 2025 requires employers to keep records that demonstrate compliance with:

  • Statutory holiday entitlement
  • Holiday taken
  • Holiday pay calculations
  • Payments made in lieu of untaken leave

These records must be retained for at least six years from the date they are created. The legislation doesn’t prescribe an exact format, but it does require records to be complete, accurate, and sufficient to prove compliance.

In practice, employers should ensure they are capturing:

1. Holiday Entitlement

  • Statutory leave (5.6 weeks per year for full-time workers)
  • Contractual leave (if additional leave is offered)
  • Entitlement calculations for part-time, zero-hours or irregular workers

2. Holiday Taken

  • Dates of leave taken
  • Number of days or hours used
  • Approval records

3. Holiday Carry-Over

  • Any unused leave carried into a new leave year
  • The reason for carry-over (e.g. sickness, maternity leave)

4. Holiday Pay

  • How holiday pay has been calculated
  • What elements are included (e.g. overtime, commission, bonuses)
  • Evidence of the 52-week reference period where applicable

5. Payments in Lieu

  • Payments made for untaken leave when employment ends

This is not just a “best practice” requirement, it’s a legal obligation. Failure to keep adequate holiday records is now a criminal offence, and potentially subject to unlimited fines.

The newly established Fair Work Agency (FWA) will be responsible for enforcement, with powers to:

  • Request and inspect records
  • Investigate underpayments
  • Issue penalties and enforcement notices

Just as importantly, without proper records, employers may struggle to:

  • Defend holiday pay tribunal claims
  • Prove compliance during audits
  • Avoid costly backdated pay liabilities

The introduction of mandatory holiday record keeping under the Employment Rights Act 2025 marks a clear shift towards greater transparency and enforcement of employee rights. While the six-year retention requirement may feel onerous, it ultimately protects both employers and employees, ensuring clarity, fairness, and accountability.

For employers, the message is simple. If you can’t evidence it, you can’t prove compliance.

Need support reviewing your holiday processes or payroll compliance?
HR4 Business can help you implement practical, compliant systems that reduce risk and save time. Get in touch with our team today.

Back to other blogs