New duty to keep records relating to annual leave and holiday pay
There has been no explicit announcement from the government, and the new duty is omitted from the Department for Business and Trade’s timeline for changes being introduced in 2026, so it has been somewhat of a surprise to employers and those in the employment industry that recently released legislation which provides commencement regulations states that s.35 of the Employment Rights Act 2025 is being brought into force on 6th April 2026.
What do Employer’s need to do from 6th April 2026?
- Keep records, in any format the employer reasonably considers appropriate, but that demonstrate that all eligible workers have been given the paid holiday they are entitled to under the Working Time Regulations.
- Keep this information for six years
- The information that must be recorded includes:
- Ordinary and additional annual leave
- Annual leave carried forward from previous years
- Details of holiday pay, including which pay elements have been included or excluded
- Any payments in lieu of annual leave, including for carried-over leave.
Despite the short notice, this does provide an opportunity for employers to audit how they record workers’ annual leave entitlement and pay, and identify where there may be gaps in their systems.
