What changed on 6 April 2026
The Employment Rights Act 2025 introduced a duty on employers to keep adequate records demonstrating compliance with holiday entitlement and holiday pay. It took effect on 6 April 2026, so this is a rule that already applies — not one to prepare for.
It brings annual leave into line with the record-keeping already expected for National Minimum Wage compliance, and it applies to every employer, not only those with irregular-hours or part-year staff.
What you must keep
Acas frames the duty as keeping records of:
- Holiday taken — the leave each worker actually took.
- Holiday carried over from previous leave years.
- Holiday pay — what was paid for that leave.
- Payments in lieu of holiday outstanding, including on termination.
The underlying duty covers entitlement to annual leave — including additional annual leave and the leave of irregular-hours and part-year workers, which the legislation names specifically — entitlement to holiday pay, and payment in lieu of holiday outstanding when someone leaves, including anything they had carried over.
How long, and in what format
Records must be kept for at least six years from the date they were made. The format is up to you: employers may create, maintain and keep the records in such manner and format as they reasonably see fit. A spreadsheet can satisfy the duty — the risk is simply that six years of spreadsheets are harder to produce on demand, and easier to lose when someone leaves or a laptop is replaced.
Who enforces it
Enforcement sits with the Fair Work Agency, established on 7 April 2026, with its powers over annual leave records phasing in after launch. The agency can inspect records and investigate compliance with statutory holiday entitlement.
Failure to keep adequate records is a criminal offence punishable by a fine. Acas notes that penalties can extend to unlimited fines, demands for underpayments and further financial penalties.
Irregular-hours and part-year workers
The legislation singles this group out, and for good reason: their entitlement is not a fixed annual figure but something that builds up as they work, usually at 12.07% of the hours worked in each pay period. That makes the underlying record — hours worked in a period, and the holiday it earned — the thing you have to be able to show, period by period, for six years.
If that describes any of your staff, our guide to holiday entitlement for zero-hours workers explains where the 12.07% figure comes from and how the 2024 rules apply, and the holiday accrual calculator works it out for a given number of hours.
What your leave system covers, and what payroll covers
The duty spans both leave and pay, and those usually live in two different systems. Neither one discharges the duty on its own:
| Record | Usually comes from |
|---|---|
| Entitlement for each leave year | Leave system |
| Leave taken, and when | Leave system |
| Carry-over in and out | Leave system |
| Holiday accrued from hours worked (12.07%) | Leave or time & attendance system |
| Ordinary vs additional leave split | Leave system |
| Holiday pay actually paid | Payroll |
| Rolled-up holiday pay on payslips | Payroll |
| Payment in lieu on termination | Payroll |
So the practical question is not “which system makes me compliant” but “can I produce both halves, for any worker, going back six years?”
What to do now
- Check you can produce, for any worker, the leave they took in any of the last six years.
- Check the same for carry-over — in and out, year by year.
- For irregular-hours staff, check you are recording hours worked per pay period and the holiday those hours earned.
- Confirm with payroll that holiday pay and any payments in lieu are retained for six years too.
- Write down where each of those records lives, so the answer does not depend on one person remembering.
How Rotaleave helps
Rotaleave keeps the leave side of the record for as long as your account is open and exports it: entitlement per leave year, every booking, carry-over in and out, the ordinary versus additional split, and — for staff marked as irregular-hours — the 12.07% accrual built up in each pay period, with the hours behind it. The holiday records report produces it per person or for the whole organisation, as CSV or print.
Your payroll system still owns the pay figures. Rotaleave does not calculate holiday pay.
Check the official sources
This is general guidance, not legal advice, and enforcement is still phasing in. Check the current position on gov.uk and Acas, which are the authoritative UK sources, and take advice on your own circumstances.