Changes to Holiday Records

Employment Rights Act 2025 changes to note

As I am sure you are aware, the Employment Rights Act 2025 will bring significant changes, some of which come into force on 6^th April 2026.

One of the changes, implements new regulations under the Working Time Regulations 1998 which imposes new obligations on employers to keep certain records relating to statutory annual leave and pay. The changes are designed for employers to be able to demonstrate compliance in respect of annual leave and pay.

The new Regulation imposes a duty on employers to keep adequate records which enable them to show compliance of the following:

1. An employee’s entitlement to annual leave. This would include details of an employee’s annual leave entitlement and how this had been calculated.

2. An employee’s entitlement to additional annual leave.

3. Annual leave entitlement for an employee on irregular hours or who works part-year (such as term-time only contracts). Again, this would include details of an employee’s annual leave entitlement and how this had been calculated.

4. An employee’s entitlement to pay for annual leave. This would set out details of the amount an employee had been paid during any period of annual leave and how this had been calculated.

5. The requirement to make a payment in lieu of accrued untaken holiday upon an employee’s termination of employment.

Many employers will likely keep a record of the above. However, the new Regulation states that records must be retained for 6 years from the date on which they were made, with the records being required to be “created, maintained and kept in such manner and formal as the employer reasonably thinks fit”.

Should an employer fail to maintain adequate records, the failure will be considered an offence which is punishable by a fine.

In light of the new obligations, it would be best for employers to review their current practices and record keeping in respect of annual leave, to ensure compliance with the new Regulation. In addition, if you have a data retention policy, you should review this and amend to state records will be kept for a period of 6 years from the date they are created.

If you require any help and support either in respect of the new Regulation or holiday calculations/pay in general, please do not hesitate to contact us. We offer a wide range of services to employer’s and will be more than happy to assist.