The new obligations
The second set of Commencement Regulations for the Employment Rights Act 2025 have been published. These implement many of the changes we expected to come into force on 6 April 2026.
In addition, the Regulations will bring into force a new duty on employers to keep records showing they have complied with their obligations to provide:
- Statutory annual leave;
- Pay for statutory annual leave; and
- Payment in lieu of outstanding statutory holiday on termination of employment (including for any statutory holiday carried forward from the last holiday year).
These obligations will apply in respect of irregular hours workers and part year workers, as well as those working regular hours.
There is no prescribed format for these records. Under the Working Time Regulations, these records may be “created, maintained and kept in such manner and format as the employer reasonably thinks fit.” However, records will need to be kept for six years from the date of creation.
Failure to keep these records will be an offence, punishable by a fine. We expect that enforcement of these record keeping obligations will move to the newly established Fair Work Agency in due course.
What should employers do to prepare?
The implementation date for these new obligations was previously unknown and so their inclusion in the second Commencement Regulations came as somewhat of a surprise.
However, as the obligations are coming into force on 6 April 2026, employers should now look to prioritise:
- Amending existing procedures if necessary to ensure that taking of all statutory holiday is being recorded centrally via an appropriate system.
- Liaising with payroll to establish a system for recording payments of holiday pay, if this is not already in place.
- Amending data destruction procedures as necessary to ensure that holiday records are retained for at least six years from creation.
- Taking separate legal advice if they have any concerns around thornier issues, such as the calculation of statutory holiday pay or misclassification risk.
For a list of the other changes under the ERA 2025 coming in on 6 April 2026 please refer to our blog and checklist.
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