Why Does Holiday Record-Keeping Matter More Than Ever?

MetroHR Holiday Recording - holiday dates scribbled down on post it note

Many of us in the past have tracked holiday informally through emails or spreadsheets, with no consistent approach that now needs to change.

From 6 April 2026, employers must be keeping detailed and accurate records of their staff’s annual leave and holiday pay.

These records must be retained for six years, and failure to comply may result in criminal sanctions, including unlimited fines.

Again, this represents a major shift for businesses as so many have relied on an informal process such as oversight for holiday records, but this approach is no longer sufficient.

What Are Your New Obligations?

Employers must be able to clearly demonstrate that they are meeting the requirements, and this includes maintaining accurate records showing:

Staff receive the correct statutory annual leave entitlement (minimum 5.6 weeks per year)
A complete record of leave taken by each individual
Holiday carried forward from previous leave years
Accurate holiday pay calculations, including what elements of pay are included
Payments made for untaken holiday on termination, including carried-over leave

And all of these records must be retained for six years.

MetroHR Holiday Recording - futuristic employee records

Meet the Fair Work Agency

MetroHR Holiday Recording - Fair agency - team meeting

The ERA 2025 introduced the Fair Work Agency a new single enforcement body.

Its role is to bring together enforcement of key employment rights including:

National Minimum Wage
Holiday entitlement and pay
Worker protections

The Fair Work Agency has significant powers, including the ability to:

Investigate noncompliance
Inspect workplaces and request records
Take enforcement action retrospectively, including issuing penalties

Poor or incomplete record keeping will not just be an administrative issue, it could be a serious legal risk for your business.

Here is a quick reminder about Holiday Entitlement

• All workers are entitled to 5.6 weeks’ paid holiday per year, including bank holidays

• Holiday entitlement applies to workers, not just employees

• Workers with irregular hours may accrue holiday and should receive pay for this

Encouraging Employees to Take Holiday

It is important to ensure that employees are taking their holiday and that you are encouraging them throughout the year to take their leave, not least from a wellbeing perspective.

Encouraging employees to take their holiday is essential and will benefit everyone as it will:

• Help prevent burnout

• And should increase your productivity

Why Do Accurate Records Benefit Your Business?

MetroHR Holiday Recording - HR team meeting

It helps you to:

Correctly calculate holiday pay, especially where pay varies or where people start and leave part way through the year
Manage transitions between absence types (e.g. holiday to sick leave)
Reduce disputes and tribunal risks
Demonstrate compliance in the event of an audit from FWA