From 6 April 2026, failing to keep adequate records of a worker’s annual leave and holiday pay became a criminal offence in Great Britain. The Employment Rights Act 2025 inserted the duty into the Working Time Regulations 1998, and it applies to every employer, regardless of size. Employers must keep records for six years, and the offence carries a fine.
That single change reframes what a tribunal, an inspector, or the new Fair Work Agency expect an employer to do. It will not ask whether staff got the right holiday. It will ask for the record that proves it.
What a 40-person business has to produce
According to this new legislation, a 40-person company can face a tribunal claim over unpaid holiday. Under the new duty, the business has to produce, for each worker, going back up to six years: the basic four weeks’ statutory leave and the additional 1.6 weeks taken, the pay calculated for each period of leave, and any payment made for leave left unused at the point the employment ended.
Pay carries its own separate evidence duty. Employers must already keep six years of payslips, timesheets, and pay adjustments to show every worker was paid at least the minimum wage.
Right-to-work checks add a separate, quieter evidence duty. Employers must keep a copy of the checked document and the check date for the duration of someone’s employment and for two years after it ends.
What failure costs
Get this wrong, or lose the paperwork, and the business loses its statutory excuse against a civil penalty of £45,000 per illegal worker for a first breach, and £60,000 for a repeat, rates in force since 13 February 2024.
It sits alongside the leave and pay records already covered here, not instead of them, and it’s another file most 40-person companies assume exists somewhere until someone actually asks to see it.
For most small and medium employers, none of that sits in one place today. Leave gets logged in a shared calendar, a paper diary, or a manager’s inbox. Pay calculations live in payroll software that doesn’t talk to the leave record. A rota shows who was scheduled to work. It says nothing about who actually did, or what they were paid for it.
The hours rule that isn’t changing
It’s worth clearing up a common misunderstanding here: employers are not gaining a new duty to log daily working hours. That requirement moved the other way. Since January 2024, employers no longer have to record each worker’s daily hours, as long as they can otherwise show they’re complying with the 48-hour weekly limit under the Working Time Regulations 1998.
Those hours records still only need to be kept for two years, not six. What changed isn’t hours. It’s holiday. Unlike the working-time records duty, which carries civil consequences, the new holiday records duty carries criminal ones.
Pay-gap data and equal pay evidence
Employers with 250 or more staff already publish their gender pay gap figures every year, which means they need accurate, auditable pay data by gender across the business.
Smaller employers don’t file that report, but they aren’t exempt from the underlying evidence problem. Any equal pay or discrimination claim will turn on the payroll records the business can actually produce, not on the policy it says it follows.
Device use and off-duty contact
UK law has no general statutory right to disconnect. But existing working-time rules can still turn an evening email into a dispute. Acas guidance is clear that some on-call arrangements can count as working time, depending on the circumstances, including when a worker is expected to respond to calls or messages outside their hours.
That creates its own evidence question, separate from hours or holiday. An email sent at 8 pm doesn’t prove an hour was worked. A policy saying staff aren’t expected to answer it doesn’t prove one wasn’t. What actually helps in a dispute is a record of the business’s device-usage policy, who acknowledged it, and any exceptions granted, not a folder of after-hours emails kept just in case.
From spreadsheets to an audit trail
This is why a growing number of UK employers are replacing spreadsheets with a single system for this evidence. Time tracking software such as WebWork Time Tracker runs clock-in and clock-out records through the same system as payroll, so recorded hours and paid hours can’t quietly drift apart.
The same platform’s employee monitoring software can report device and policy compliance per team member, configurable to run silently with screens blurred, alongside the attendance record, evidence collected without an intrusive daily presence.
Vahagn Sargsyan, Founder and CEO of WebWork Time Tracker, says the gap usually shows up at the worst possible moment: “Most small firms find out their records are thin on the day someone asks for them. A rota shows who should have worked. It doesn’t show a tribunal who did.”
At WebWork, working with more than 32,000 businesses, the pattern is consistent. The employers who struggle hardest under an audit or a tribunal request are the ones still trying to reconstruct records after the fact, rather than generating them automatically as work happens.
Evidence, not intentions
For UK employers, the shift is the same across the board. Policies and good intentions are no longer enough on their own. What matters under each of these rules- holiday, hours, pay or device use- is whether the business can produce the specific record a tribunal or the Fair Work Agency asks for, within the time limit the law now sets.
Enforcement is also getting more direct. The Fair Work Agency, established on 7 April 2026, can conduct unannounced workplace inspections and require access to a business’s premises, records, and systems, even without a prior complaint. That shifts much of the burden away from individual tribunal claims, and toward proactive checks the business can’t see coming.
That’s a lower bar than it sounds, but only if the record-keeping is built into the everyday workflow rather than assembled after a claim lands. For a 40-person company, the practical test is simple: if someone asked for six years of holiday records tomorrow, could you produce them? For most SMEs today, honestly, the answer is no.
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