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Holiday law changes from 2026 — what employers need to know & do

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From 6 April 2026, employers have faced a new statutory duty to keep records relating to annual leave and holiday pay. Introduced by the Employment Rights Act 2025 (ERA), this marks a shift in how holiday compliance is enforced.

Here, Hannah Morrison from our award-winning employment team explores what the new record-keeping requirements mean for employers, the risks of non-compliance and steps that organisations should take now to prepare.

 What changed in 2026?

Mandatory holiday record‑keeping (from 6 April 2026)

All employers are now required to keep adequate and accurate records demonstrating compliance with statutory holiday entitlement and holiday pay obligations. This duty applies universally across the workforce, regardless of seniority, employment status or working pattern — and therefore captures full-time, part-time, irregular hours and casual workers alike.

The obligation isn’t limited to simply recording time off — rather, it extends to documenting how both holiday entitlement and pay are calculated. In practice, this will require employers to ensure that their systems and processes provide a transparent and auditable account of how holiday rights are administered in each case.

 What records must be kept?

Employers must keep records to show that, for each worker, they have complied with their entitlement to:

  1. -annual leave
  2. -holiday pay (including payment in lieu of untaken holiday on termination of employment).
     
While the regulations don’t specify precisely what records need to be kept in order to demonstrate compliance, it would be prudent for employers to keep records of the following:

  • -Each worker's statutory annual leave entitlement, including any holiday carried forward from previous years.
  • -Holiday bookings, approvals and leave taken.
  • -Communications reminding workers to take their holiday allowance each year and warning that any untaken leave at the end of the leave year will be lost (except where it can be carried forward). 
  • -Holiday pay calculations, including any 52-week reference period calculations (where relevant) and the pay elements included (such as overtime, commission and bonuses). 
  • -Payroll data showing holiday payments made.
  • -Payments in lieu of accrued but untaken holiday on termination of employment.
  • -For irregular-hours and part-year workers, the accrual methodology used and associated holiday pay calculations.

These records must be retained for a minimum period of six years. While there’s flexibility as to the format — whether held within HR systems, payroll platforms or spreadsheets — the records must be complete, accurate and readily accessible in the event of inspection or challenge.

There’s also a data protection element to consider. As these records contain personal data, employers must ensure that they’re handled in accordance with UK GDPR requirements. In practice, this means being transparent with workers about how their holiday information is used, informing them that records will be retained for a minimum six-year period and having processes in place to retrieve records when responding to subject access requests.

For further information about why this matters, what employers should do now, and the key takeaways please read the full article on our website:

https://www.brabners.com/insights/employment/holiday-law-changes-from-2026-what-employers-need-to-know-do 

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