Employee hours and holiday records: what UK law requires

Written 30 August 2026 · about a 7 minute read

On 6 April 2026 keeping poor holiday records stopped being untidy and started being a criminal offence. Most of the businesses it applies to have not changed anything, largely because nobody has said plainly what the new duty asks for. This is the plain version: what you have to keep, how long for, and what “adequate” probably means given that nobody has yet defined it.

What changed on 6 April 2026

The Employment Rights Act 2025 introduced a duty to keep adequate records of annual leave entitlement and holiday pay. Three things about it matter more than the rest:

• Records must be kept for six years from the date they were made.
• Failing to keep adequate records is a criminal offence, punishable by an unlimited fine.
• The Fair Work Agency, established on 7 April 2026, is the body that will enforce it. Its remit is being phased in and reporting indicates holiday rules come into its scope during 2027 — but the duty and the offence are in force now, whoever is enforcing on any given day.

That is a significant change of posture. Holiday record-keeping used to be something you regretted at a tribunal. It is now something a body with inspection powers can come and ask about, and the failure is criminal rather than merely expensive.

What the records have to show

The duty is to keep records sufficient to evidence how holiday entitlement and holiday pay were calculated, approved, taken and paid. In practice that means being able to show, for each worker:

• Entitlement — how much leave they were owed, and how that figure was arrived at. For salaried staff on fixed hours this is arithmetic. For irregular-hours and part-year workers it is a calculation, and the calculation is the thing you have to be able to reproduce.
• Ordinary and additional leave — the four weeks derived from retained EU law and the additional 1.6 weeks are treated differently in places, and a record that lumps them together loses information you may later need.
• Anything carried forward, and on what basis.
• Leave taken — the dates, and who approved them.
• Holiday pay — the amount, and which elements of pay were included or excluded in working it out. Overtime, commission and allowances are where holiday pay disputes actually happen.

What “adequate” means when nobody has said

Here is the honest part. The Act allows records to be created and kept “in such manner and format as the employer reasonably thinks fit”, and then stops. There is no prescribed format, no template, and at the time of writing no detailed official guidance on where the bar sits.

That is uncomfortable, but it is not unusable. A working standard that is likely to be defensible, and which you can test yourself against this afternoon:

Note what the test is really asking: not whether you have a system, but whether the system still holds the history. Those are different questions, and most businesses only discover the difference when somebody asks.

The same distinction decides a separate obligation arriving in 2027 — see proving you gave notice of a shift, where the presumption runs against the employer unless the contrary is shown.

The case that makes this hard: irregular hours

If everyone you employ works fixed hours, the reconstruction test is mostly a filing exercise. If you run shifts, it is not, because the entitlement itself is a calculation that changes every pay period.

For leave years beginning on or after 1 April 2024, holiday for irregular-hours and part-year workers accrues at 12.07% of the hours actually worked in each pay period, credited on the last day of that period. Employers may also use rolled-up holiday pay for these workers — 12.07% of total earnings in the period, paid with each payday rather than when leave is taken, and it must appear on the payslip as a separately identified line.

This is where record-keeping stops being administrative. To evidence entitlement for an irregular-hours worker you need the hours they actually worked, per pay period, going back six years — because the entitlement was derived from them. Your holiday records and your attendance records are the same record viewed from two angles, and if the hours are thin or have been overwritten, the holiday figure cannot be defended no matter how neatly it is stored.

Two practical consequences. First, whatever captures clock-in and clock-out is now part of your holiday compliance, not a separate system. Second, if you use rolled-up pay, the payslip line is itself part of the evidence — check that your payroll actually labels it, because “it was included in the rate” is exactly the argument the rules were written to stop.

Acas has a clear explanation of the accrual method for irregular hours and part-year workers, and it is worth reading before you assume your current figures are right.

The other records you already owed

The holiday duty is new. Most of the rest is not, and it is worth seeing them together because the retention periods differ and the longest one governs how you actually store things.

Confirm each of these against gov.uk for your own circumstances rather than taking them from any blog, including this one — retention periods move, and several published tables disagree with each other. Many employers keep six years across the board on the reasoning that it covers the limitation period for a contract claim and is simpler than running five different clocks. That is a judgement, not a rule.

Six years is longer than your spreadsheet

Six years is the part that catches people out, because it is longer than most of the things businesses keep records in actually last.

Six years covers, for a typical operator: at least one payroll provider, probably two rota systems, several managers who have since left, one office move, and at least one “we migrated everything to the new drive and the old one is around somewhere”. The duty is not to have had the records. It is to still have them, and to be able to produce them.

A spreadsheet is particularly poor at this, and not for the reason people assume. The problem is not that spreadsheets are informal. It is that a spreadsheet records the current state and not the history. Once somebody edits the cell, the previous value is gone. “What was this employee’s balance in March 2024, and who approved the day they took?” is unanswerable from a file that has been edited two hundred times since, and that is precisely the shape of question the duty anticipates.

A checklist you can run this week

1. Pick three employees at random and run the reconstruction test above on each.
2. Check whether your leave records show who approved each request, not just that it was approved.
3. Check whether holiday pay calculations record which pay elements were included.
4. Find out where records from your previous system live, and whether anyone can still open them.
5. Confirm irregular-hours and part-year workers are calculated on a documented basis.
6. Check carried-forward leave is recorded with a reason.
7. Write down your retention periods, and who is responsible for them.
8. Diarise a check for whenever you next change payroll or rota software — migrations are where six-year histories go to die.
9. Make sure leavers’ records survive their departure.
10. Ask whether you could produce all of this if someone asked for it on Monday.

What happens if you get it wrong

The Fair Work Agency was established on 7 April 2026, bringing together enforcement functions previously spread across several bodies. Per its own enforcement policy statement, its officers can require people to attend and answer questions, demand specified information or documents by a given date, and carry out site visits — usually arranged in advance, but unannounced where necessary.

Where it finds underpayment it can issue a Notice of Underpayment carrying a penalty of 200% of the total underpayment, subject to a minimum of £100 and a maximum of £20,000 per worker. The penalty is reduced by half if the unpaid wages and half the penalty are paid within 14 days. Note that carefully: several published summaries say the penalty drops to 50%, which is a different and much smaller number than the gov.uk statement describes.

Its remit is being phased in rather than switched on whole, and reporting indicates holiday rules enter scope during 2027. Do not read that as “nothing applies yet”: the record-keeping duty is in force now and the offence exists now. What is phasing is who polices it, not whether it is law.

Where software helps, and where it does not

Software will not make you compliant. It will make the evidence a by-product of doing the work rather than a separate exercise you have to remember.

What that looks like in practice: leave requested, approved and recorded in one place, with the approver and timestamp attached; balances that are derived from the record rather than typed over it; and history that is added to rather than overwritten, so last year’s answer is still there after this year’s edits. OPSICLE does this because it is how leave has to work if the numbers are going to survive a question about them later. Any system built on the same principle will do.

The thing to check before you buy anything, including ours: ask the vendor to show you a leave record from three years ago, including who approved it. If the demo cannot do it, neither will your installation.

Sources

• Employment Rights Act 2025 — legislation.gov.uk
• Employment Rights Act 2025 — Acas
• Working Time Regulations 1998 — legislation.gov.uk

If something here is wrong or has moved on, tell us at info@opsicle.co.uk and we will correct it and say that we have.