This week, the Government has published regulations that will bring a number of changes in the Employment Rights Act into force in April 2026.
There was one big surprise in the regulations, as the Government has confirmed that the new duty on employers to keep records of annual leave is now coming into force on 6 April 2026. This change had not featured on the Government’s implementation roadmap or the updated timetable, so there had been no warning that it was coming into force so soon!
New duty to keep annual leave records for six years
It is already seen as good practice to have a system in place to record annual leave and holiday pay, but there is currently no specific legal obligation to keep records (except for “employment businesses”).
The ERA will impose new obligations on employers to keep records relating to compliance with annual leave and pay for annual leave from 6 April 2026.
The information that needs to be recorded includes:
- Ordinary and additional annual leave
- Annual leave carried forward from previous years
- Details of holiday pay, including which pay elements have been included or excluded
- Any payments in lieu of annual leave, including for carried‑over leave.
Employers will be required to keep records in relation to all eligible workers – including people working irregular hours and part-year workers.
The records can be kept in any format that the employer reasonably considers is appropriate. Records must be kept for six years from the date on which they were made.
If an employer fails to comply with this obligation it will amount to a criminal offence, which is punishable by a fine. It is expected that the enforcement of holiday obligations will fall within the remit of the new Fair Work Agency which is being established on 7 April 2026 (see below).
Reminder of other changes coming into force in April 2026
As anticipated, the regulations have confirmed that the following changes will come into force on 6 April 2026:
- Statutory paternity leave and parental leave will become a day one right.
- The maximum protective award for failure to collectively consult rises from 90 days’ gross pay to 180 days’ gross pay. It will apply to dismissals taking effect on or after 6 April 2026.
- Sexual harassment will be added as a category of ‘protected disclosure’ under whistleblowing legislation.
- Changes simplifying the process of trade union recognition.
Also from 7 April 2026, the Fair Work Agency (FWA) will be established. The FWA is expected to have significant authority, including the ability to investigate employers, conduct workplace inspections, issue civil penalties for underpayment, and represent workers in legal proceedings. The regulations have confirmed that a number of its enforcement powers can be exercised immediately upon its establishment on 7 April 2026. However, we are awaiting regulations transferring enforcement powers from HMRC to the FWA in relation to holiday pay, national minimum wage and sick pay. Whilst the FWA is going to have significant powers we do not yet have precise details as to how it is going to be funded and resourced.
The regulations make no mention of the biggest change due to come into effect next month, which is the removal of waiting days and the lower earnings limit for Statutory Sick Pay. We anticipate that separate regulations dealing with these changes will be issued imminently.
We have published an article with more details on the upcoming changes taking effect in April 2026, please find this here Employment Rights Act 2025: Key Changes for April 2026 | Howes Percival
Anna Bithrey comments: “For some employers this new duty to keep annual leave records could create a significant administrative burden. Employers need to urgently review how annual leave and holiday pay are recorded in their organisation. If adequate records are not being kept then employers will need to act quickly to ensure that they have a system in place to record the required information.”
If you have any questions on any of the upcoming changes or need help with reviewing and updating your policies, please contact a member of the team here.
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