The law changed in April 2026. A lot of businesses missed it.
A new legal duty with very little warning
From 6 April 2026, UK employers are legally required to keep records of workers' annual leave entitlements and holiday pay. The duty comes from Section 35 of the Employment Rights Act 2025, inserting a new Regulation 16B into the Working Time Regulations 1998.
Employment lawyers flagged it when the legislation was published, leaving many clients with under two weeks to act. The provision didn't appear in the government's own implementation timeline. If it passed you by, you're in good company, but the obligation is already live.
What the law requires
Records must be kept for six years. The format is your call. The Act says employers may keep records "in the manner and format that they reasonably think fit", but keeping them is not optional.
"Adequate" records, per employment law guidance, means being able to demonstrate:
- How much statutory annual leave each worker took
- Ordinary leave (regulation 13) and additional leave (regulation 13A) tracked separately
- Any leave carried forward between leave years
- How holiday pay was calculated, including variable pay elements like overtime and commission
- Any payments made in lieu of annual leave
Zero hours workers, casual workers, and term-time staff need particular attention. Their entitlement accrues on a pro-rated hourly basis, which makes the record-keeping more involved than it is for standard employees.
- In force from 6 April 2026
- Six-year retention requirement, including for employees who have left
- Failure to comply is a criminal offence, with unlimited fines possible
- Enforced by the new Fair Work Agency
- Introduced via Section 35, Employment Rights Act 2025
Getting it wrong
Failure to maintain adequate records is a criminal offence under the Act. Not a civil penalty, not an administrative notice: criminal. Unlimited fines are possible.
Weak records also create practical problems. If a worker brings a holiday pay dispute and your documentation is thin or missing, you're on the back foot before you've started arguing the merits.
The Fair Work Agency, which launched alongside the Employment Rights Act, has powers to audit employment practices, require employers to produce documents, and order repayment of statutory underpayments where breaches are found.
The bit that catches people out: former employees
The six-year retention requirement covers employees who have left, not just current staff.
Deleting a leaver's records when they go isn't compliant. You need their full leave history stored and accessible for the full six years. For businesses relying on spreadsheets, this tends to be where things fall apart. Files move. Laptops get replaced. Records from three years ago are hard to locate when a Subject Access Request or tribunal claim arrives.
How Simple Leave handles this
When someone leaves your organisation, you mark them as inactive in Simple Leave. Their leave history (entitlements, days taken, carry-overs, approvals) stays in your account, accessible if you ever need to demonstrate compliance to the Fair Work Agency or respond to a claim.
Inactive employees don't count toward your subscription. So there's no financial pressure to delete old records, and the compliant path costs nothing extra.
What to do now
The law is already in force. Here's where to start.
Audit what you're actually recording. Most businesses find gaps when they look carefully: leave by type (regulation 13 vs 13A), holiday pay calculation workings, and carry-over records are the common ones.
Check how you handle leavers. Do former employees' records exist and can you access them? If you've been clearing files on departure, stop now and work out how far back you can recover.
Think about whether spreadsheets can support six-year retention. A file on someone's laptop or a shared drive is easy to lose and hard to audit. Electronic systems with proper access controls and backups are better suited to this.
Make sure whoever handles leave knows what to capture. If HR, payroll, and line managers are all involved in different parts of the process, they need to be coordinated.
Pay extra attention to zero hours and casual workers. The accrual calculation is more complex for variable-hours staff, and errors there carry more risk under the new framework.
Frequently asked questions
Do UK employers have to keep annual leave records by law?
Yes, from 6 April 2026 under Section 35 of the Employment Rights Act 2025. Employers must keep adequate records of annual leave entitlements and holiday pay for at least six years. Failure to do so is a criminal offence.
How long must annual leave records be kept?
At least six years, including for employees who have left the business. Deleting a leaver's records when they go is not compliant with the new requirements.
What records must UK employers keep for annual leave?
Records of: the amount of statutory leave each worker took; ordinary leave (reg 13) and additional leave (reg 13A) separately; leave carried forward between years; how holiday pay was calculated including variable pay; and any payments in lieu of annual leave.
Who enforces the annual leave record-keeping requirement?
The Fair Work Agency, which launched alongside the Employment Rights Act 2025. It has powers to audit employment practices, require employers to produce documents, and order repayment of statutory underpayments.