In an unexpected development, recent commencement regulations confirm that from April 6, 2026, the new legal duty requiring employers to keep adequate records of workers’ annual leave and pay entitlements will come into effect. The timing of this new requirement, introduced under the UK Employment Rights Act 2025 (“ERA 2025”), was previously unknown and had not featured in the Government’s previously published implementation timelines.

The key elements of the new record-keeping obligation to be aware of:

• Employers will be required to keep “adequate” records to demonstrate compliance with entitlement to annual leave (including additional annual leave and annual leave of irregular hours and part-year workers), entitlement to holiday pay, and the requirement to make payment in lieu of holiday outstanding on termination of employment (including any carried over).
• Employers will have discretion to create, maintain and keep the records in such manner and format as they reasonably see fit.
• Records must be retained for six years from the date of creation.

Enforcement

Failure to comply with this new duty will be an offence, punishable by a fine.

The Fair Work Agency, set to be established on April 7, 2026, as part of the ERA 2025 reforms, is anticipated to play a central role in enforcing compliance. In due course, it will have a range of enforcement powers, including to request records, issue notices of underpayment, and bring employment tribunal proceedings on a worker’s...

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