Employers required to keep annual leave and pay records from 6 April 2026
The Government has introduced new regulations implementing key provisions of the Employment Rights Act (ERA) 2025, with changes coming into force since 6 April 2026.
One of the most significant but overlooked developments for employers is a new legal requirement to maintain comprehensive records of annual leave and pay for a minimum of six years.
What has changed?
Regulation 3(8) of the Employment Rights Act 2025 commencement regulations brings Section 35 of the Act into force.
This places a statutory duty on employers to keep “accurate, complete” records relating to employees’ annual leave entitlement and pay, which must be retained for at least six years.
This amendment has received little public attention and does not feature in the Department for Business and Trade’s published implementation timeline for the Plan to Make Work Pay or the Employment Rights Act 2025.
As a result, many employers may be unaware of the requirement until much closer to the implementation date.
What does this mean for employers?
While many employers will already hold information on annual leave and pay, your existing processes should now be reviewed to ensure they meet this new legal standard.
Employers should be able to demonstrate:
- Annual leave entitlement
- Leave taken
- Leave paid
- Any carry‑over or adjustments
This change will inevitably increase administrative pressure, particularly for payroll and HR teams, and may require updates to systems, record‑keeping procedures and internal controls.
Enforcement of the new rules
The new Fair Work Agency (FWA), established on 7 April 2026, is expected to play a central role in overseeing compliance with annual leave and related employment rights.
While previous government factsheets confirmed that enforcement timescales would be announced in due course, it remains unclear how quickly the FWA will begin active enforcement once operational.
Employers should, therefore, assume that compliance may be assessed early and take steps now to ensure their records are robust.
Get your records in order
Employers should begin reviewing their annual leave and pay recording processes now to ensure that they are accurate, consistent and capable of retaining records for six years.
If you need support or guidance to amend your payroll systems, please get in touch with our team at MT Pay.