Failure by Employers to Keep Holiday Records Becomes a Criminal Offence From April 2026

Julie Bann, Catrin Mills, David Leach and Christian Grierson talk through the upcoming changes to employment law.

Just as you thought you were on top of the employment law changes coming into force in April 2026, the publication of the latest commencement regulations (giving effect to the relevant provisions of the Employment Rights Act 2025) has revealed a last-minute development.

The new statutory duty on employers to keep records of workers’ annual leave and holiday pay will now come into force on 6 April 2026.  What’s more, failure to comply will amount to a criminal offence.

Previously, while it is clearly good practice to maintain holiday leave records, there was no legal duty to do so. The Working Time Regulations required employers only to keep records on working time.  From 6 April 2026, however, employers are legally obliged to  maintain adequate records of annual leave entitlement and pay.

The change had not been flagged in the Government’s roadmap for the implementation of the new Employment Rights Act, leaving employers with less than one working week to get ready.

Adequate Records

Adequate records must document that:

• Workers have been notified of and allowed to take their annual statutory holiday entitlement (5.6 weeks)
• Workers were correctly paid for this leave, including those on irregular hours or part-year workers
• Workers were correctly paid for accrued but untaken leave on termination of employment including any leave carried over from the previous holiday year

Records can be kept in a manner and format that the employer “reasonably thinks fit” but they must be kept for six years.

Failure to comply with this duty will amount to a criminal offence and result in a fine, which could be unlimited.  It is expected that enforcement will be by the new Fair Work Agency which will be established on 7 April 2026.

It is understood that the Fair Work Agency will have the power to demand any underpayment uncovered is paid and impose a penalty on top of up to £20,000 per underpaid individual.

What Employers Should Do Now

What you should do now is:

• Audit your holiday and payroll systems to make sure they capture the correct information and that this can be safely retained for six years.
• Immediately implement a clear record‑keeping process if you don’t already have one. Think, if you were asked to produce this information now, could you?
• Consider how you track and ensure that employees are taking their holiday, e.g. are there records of reminders that employees need to book leave? Or, where notice is served for an employee to take holiday, is this documented?
• Review holiday pay calculations to ensure correct payments have been made.
• Ensure your HR and payroll staff, and managers, are trained and up to date on the new requirements.
• Update any relevant policies to reflect new record-keeping practices.
• Prepare for potential Fair Work Agency inspections.

Need Expert Advice?

For further information or advice on any of the April 2026 employment law changes, contact us on This email address is being protected from spambots. You need JavaScript enabled to view it..

Don’t forget, you can also sign up for our Sharpe Minds webinar series to keep up to date with ERA developments. The remaining sessions can be found here.

Julie Bann and Catrin Mills are Partners, David Leach and Christian Grierson are Senior Associates at Sharpe Pritchard LLP.

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This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email This email address is being protected from spambots. You need JavaScript enabled to view it..