This one arrived quietly on 6 April 2026 and has been almost entirely drowned out by the noise around sick pay and dismissal rights. It came in through section 35 of the Employment Rights Act 2025, brought into force by commencement regulations published barely a week beforehand and left off the government's own implementation timeline. Since that date, employers must keep adequate records of annual leave and holiday pay, and retain each record for six years from the date it was made. There are no transitional provisions.
It applies to every employer. There is no headcount threshold.
What "records" means here
Ordinary and additional annual leave, leave taken and accrued, anything carried forward, payments in lieu of untaken leave including carried-over leave, and the holiday pay calculations behind all of it — which pay elements were counted and which were left out. It covers every eligible worker, including irregular hours and part-year workers. For salaried staff on a fixed entitlement this is straightforward. It gets harder where holiday pay is built from overtime, commission or a reference-period average.
Six years is a long time. It is longer than most small employers keep anything, and considerably longer than the average spreadsheet survives a laptop change.
Failing to keep adequate records is a criminal offence, punishable by an unlimited fine. Enforcement sits with the Fair Work Agency, launched on 7 April 2026 with powers to inspect records. If your holiday data lives in a spreadsheet on one person's machine, or a shared calendar, or the manager's head, you do not have a six-year record. You have a six-year exposure.
Why the retention period is six years
Section 35 sets it at six years from the date each record is made, so the clock runs per record rather than per leave year. Separately, government has proposed that the Fair Work Agency should be able to investigate holiday pay going back six years — that is the alignment that matters. The record you are required to keep is, in practice, the record you will be asked to produce.
That framing is useful. This is not a filing obligation. It is the evidence base for any argument about whether someone was paid correctly for their leave.
What to do
Find out where your holiday data actually lives and who else can reach it. If the answer is one spreadsheet and one person, fix that first — before worrying about the finer points of what the record should contain.
Then check that what you hold shows both the leave and the pay. Plenty of systems track days off perfectly well and hold no record of what was paid for them, which only satisfies half the obligation.
The employers who will struggle with this are the ones who have always managed holiday informally. Six years of retrievable records is a systems question, and it is easier to answer now than in the middle of a claim.