Is there a legal obligation for employers to keep records of holidays taken by their staff together with holiday pay?

As of 6th April 2026, regulation 3(8) of The Employment Rights Act 2025 (Commencement No. 2 and Transitional and Saving Provisions) (Amendment) Regulations 2026 will update section 35 of The Employment Rights Act 2025 (ERA) to introduce a new obligation to the Working Time Regulations. This will require employers to keep adequate records, in a manner they think fit, of holidays and holiday pay that cover all eligible workers, including those working irregular hours, part-year workers (term time), and those receiving rolled-up holiday pay. Such records must be kept for six years from the date on which they were made.

For the avoidance of any doubt, employers should keep records of what is statutory and contractual leave, whether any leave has been carried over from previous years, how holiday pay is calculated, and whether there has been any payment in lieu of holidays and, if so, the reasons why.

A failure to comply with this new obligation will be a criminal offence, especially where an employer knowingly or recklessly provides false information or documents, or obstructs an investigation, and may result in unlimited fines. It is expected that, in time, the newly formed Fair Work Agency (FWA), which comes into place on 7th April 2026, will oversee enforcement of these obligations rather than HMRC.

The FWA, when fully operational, will have extensive powers, including the power to enter premises (with a warrant), inspect and seize documents, and serve notices of underpayment with a set period for employers to pay.

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