Summary: As of April this year, employers face a new legal duty to keep detailed annual leave and holiday pay records for six years. They also face growing risk of employees stranded abroad by travel disruption. HR teams must act immediately to ensure compliance, update policies and build consistent frameworks.
As of 6 April 2026, employers are legally required to keep comprehensive records of annual leave and holiday pay for a minimum of six years. The duty was introduced through amendments to the Working Time Regulations under the Employment Rights Act. It formalises what had previously been best practice into a statutory obligation.
Employers must now record any ordinary and additional leave, as well as holiday that is carried forward from one financial year to the next. Holiday pay calculations must be recorded. This includes details of what has been included or excluded, as well as any payments made instead of taking leave (for example, for unused leave carried over from a previous year).
Most organisations have a method of tracking annual leave. But this is the first time the law has explicitly required employers to retain detailed records of leave taken and how holiday pay is calculated.
Time is of the essence
There is no prescribed format, but records must be clear, accurate and accessible. The lack of notice has been criticised. Furthermore. without statutory guidance or transitional arrangements, organisations that do not currently keep sufficiently detailed records will need to act quickly to ensure compliance.
While the law came into effect in April, retrospective penalties will be given to underpayments backdated to December 2025.
Enforcement will fall to the newly established Fair Work Agency, launched on 7 April 2026. It has provisions to inspect records and take action where employers fail to meet new standards. Now classed as a criminal offence, the consequences for failing to comply can be quite serious with unlimited fines.
This is the first time the law has explicitly required employers to retain detailed records of leave taken and how holiday pay is calculated.
Travel disruption policies essential
Alongside these new compliance obligations, employers are also being urged to prepare for circumstances in which employees become stranded abroad.
Ongoing geopolitical situations continue to have far-reaching consequences, with flight disruption already increasingly common in recent years. As a result, organisations without a formal travel disruption policy may find themselves exposed to complex questions around holiday entitlement, pay and absence. This will especially be the case during the upcoming summer holiday season.
This requires a consistent, formalised framework which should be embedded across a company. A travel disruption policy should clearly set out the employee’s options where they are unable to return to work as planned.
These may include whether employees can work remotely, where both practical and legally compliant, using remaining holiday allowances, taking unpaid leave or making up the time on their return where possible.
Consistency is crucial to ensuring employees are treated equally and fairly. Some options may be suitable for some roles and not others. Where this occurs, employers must explain why in the policy to ensure full transparency for employees.
A well-communicated policy helps reduce the scope for dispute and limits the risk of discrimination or unfair treatment claims. Policies should also distinguish between different scenarios. For example, supporting employees in safe versus unsafe situations to ensure responses are proportionate and clearly defined.
Lending your support to an employee
When an employee informs their employer that they are unable to return from holiday, the employer should consider how to deal with any additional periods of absence. This could include extending their holiday period, maintaining pay or agreeing periods of unpaid leave.
The employer may also assist in directing them to or providing them with official guidance. For example, updates from the Foreign, Commonwealth & Development Office.
Requiring the employee to maintain regular contact will be important, to stay informed about the employee’s situation. Where an employee is stranded but safe, employers may wish to assess whether there is any ability for them to work remotely. This must be practical and legally compliant, and appropriate to the role.
Employers should be mindful that where travel relates to work, a duty of care remains towards the employee. This means that employers must be more involved in making alternative travel or accommodation arrangements, reviewing expenses for the trip and generally ensuring the employee is safe. Where appropriate, directing the employee to any mental health resources can also be helpful.
Consistency is crucial to ensuring employees are treated equally and fairly
Aligning disruption and compliance
Both increased travel disruption and new compliance obligations are now in effect. Therefore, employers are being strongly encouraged to review their current arrangements without delay.
This makes it essential for employers to review not their policies and how those decisions are documented. Decisions made in response to travel disruptions must now be accurately recorded and retained for six years.
In practical terms, employers should review holiday and payroll records to ensure they meet the new legal standard now. They must ensure they backdate to December last year.
Exisitng processes must be amended to ensure that the correct information is now tracked. This will mean aligning absence management with payroll and data retention processes, as well as equipping HR teams and managers to respond consistently and document decisions accurately.
Clear policies, accurate records and a kind, consistent approach will be central to managing both employee expectations and regulatory requirements in the months ahead.
Actionable insights
- Check your records go back to December 2025: Backdated penalties apply from then, not April 2026. Leave taken, carry-forwards, pay calculations and any payments in lieu all need to be captured.
- Connect your leave and payroll systems: Records must show what leave was taken and how pay was calculated.
- Write a travel disruption policy: Cover remote working, use of remaining leave, unpaid leave and time make-up. Explain which roles qualify for which options.
- Give line managers a clear script for stranded employees: They need to know what to offer, what to document and how often to expect contact.
- Log every disruption decision as it’s made: Any agreed extension, pay change or remote working arrangement needs to be on record and kept for six years.
Did you find this article useful? Read: Day One SSP: Closing the gap between policy and practice
