From 6 April 2026, the Employment Rights Act 2025 (the Act) will place a new duty on employers to create and retain records that are adequate to show they comply with statutory holiday entitlement rules, covering both leave taken and the pay associated with it.
The Act inserts a new regulation 16A into the Working Time Regulations 1998. The records must show that the employer has complied with the requirements relating to:
- The amount of statutory leave taken by each worker including the four-week annual leave requirement and the additional annual leave and the calculation of annual leave for an irregular hour’s worker.
- The calculation of any holiday pay including the amount of pay to which the employee is entitled on termination
Employers must retain these records for at least six years and may use any reasonable method or format to create, store, and maintain them. Failure to comply with this duty may be considered a criminal offence punishable by a fine.
Considerations for employers:
Employers will now need to evaluate whether their existing recording systems are sufficient, or whether new, accurate procedures and retention policies for holiday leave and holiday pay records must be implemented to ensure compliance. Employers may also need to consider how holiday pay should be calculated, which can become complex where variable elements such as overtime are involved.
For the changes coming into force in April and what you as employers should be doing please listen to our podcast Employment Rights Act 2025: What is coming into force in April 2026? | Global law firm | Norton Rose Fulbright
Thank you to Hannah Featonby-Lyons for all her help in preparing this post