Holiday pay record keeping rules changed from April 2026 – is your business prepared?

From 6 April 2026, UK employers will be required to keep detailed holiday pay and annual leave records for all employees for a minimum of six years.

The changes form part of the Employment Rights Act 2025 and will be enforced by the new Fair Work Agency (FWA), which will have powers to inspect records and investigate compliance with statutory holiday entitlement rules.

The focus is particularly on ensuring workers receive the correct minimum paid holiday entitlement of 5.6 weeks per year especially casual, irregular hours and part year workers, where holiday calculations can often become more complex.

What records will employers need to keep?

Employers must maintain “adequate” records showing:

• Annual leave taken
• Holiday carried over
• Holiday pay received
• How holiday pay has been calculated, including bonuses and commission where applicable

These records must be retained for six years from the date the holiday pay was made.

Why this matters.

Failure to keep appropriate records will become a criminal offence and could result in unlimited fines.

While enforcement activity is expected to focus initially on higher risk sectors such as hospitality and retail, all UK employers should review their processes to ensure compliance.

What should employers do now?

There are a few practical steps businesses can take now to prepare:

• Review payroll and HR systems to ensure holiday and pay records are captured accurately
• Check calculations for irregular hours and part year workers
• Review employment contracts and holiday entitlement wording
• Ensure records can be easily accessed if requested by the Fair Work Agency

For many businesses, this is a good opportunity to sense-check whether current holiday pay processes are robust, consistent and properly documented.

Need support reviewing your processes?

Our HR specialists can help you review your holiday pay procedures, record keeping processes and payroll systems to ensure your business is prepared for the upcoming changes.

Juliet Mellues