You have 14 staff. Three work irregular hours: some weeks 30, some weeks 12, depending on what is on. Two are part-time. One is on a zero-hours arrangement inherited from the previous owner and never quite formalised. Your HR admin left in February, and the finance person kind of took over the spreadsheet.
This is exactly the kind of team where holiday pay records UK employers must maintain quietly fall apart: leave tracked in one place, pay calculated somewhere else, nobody connecting the two.
On 6 April 2026, that quiet problem became a legal one. Section 35 of the Employment Rights Act 2025 introduced a duty for every UK employer to keep records of annual leave taken, holiday pay calculations, carry-over, and payments in lieu, and to retain those records for six years. Failing to keep them is a criminal offence. The Fair Work Agency, which launched on 7 April 2026, has powers to investigate employers proactively, without waiting for a complaint, and can look back six years.
Most businesses the bureau works with have no single place where any of this lives.
What holiday pay records UK law now requires
From 6 April, every employer must document three things for every worker, every year:
- The amount of leave taken.
- Any payments made in lieu of untaken holiday.
- How holiday pay was calculated, including which reference period was used.
Records must be retained for six years from the date they were made. The scope covers everyone: full-time, part-time, irregular hours, and part-year workers. The regulations were introduced as implementing measures under the Employment Rights Act 2025 and published on the day they took effect, with limited prior notice to most employers.
The criminal offence provision matters. This is not a civil penalty you can argue down over eighteen months with a letter from a solicitor. It sits alongside minimum wage as a criminal enforcement provision, and the Fair Work Agency was built specifically to pursue both.
Why irregular hours workers make this genuinely complicated
For a full-time salaried employee, holiday pay is one week's pay. Straightforward.
For the irregular-hours workers on your team, it is not. UK law requires their holiday pay to be calculated as an average of the last 52 weeks in which they actually earned pay. Weeks with no earnings are excluded. The reference window rolls forward each time you calculate. Every calculation must be documented.
That means someone has to pull 52 weeks of earnings data per worker, identify which weeks had earnings and which did not, calculate the average, and write it down in a retrievable form. Then do the same next time that worker takes leave.
In practice, the earnings data is at the payroll bureau or inside payroll software. The leave record is in a spreadsheet or HR tool. Neither system produces the 52-week calculation automatically, and neither stores the documentation. The gap between them is exactly what the new requirement is designed to close, and close it does: by making the absence of documentation a criminal matter rather than a civil one.
The six-year lookback and what the Fair Work Agency can actually do
The Fair Work Agency's enforcement policy statement, published 7 April 2026, is clear about its powers. It can open investigations on its own initiative, based on intelligence and risk profiling, without a worker complaint. Penalties for identified underpayments run to 200% of the amount owed, with a minimum of £100 and a maximum of £20,000 per individual. For the three irregular-hours workers in a team like the one at the top of this post, that ceiling is £60,000.
The FWA's current active remit covers National Minimum Wage, employment agency standards, and gangmaster licensing. Holiday pay enforcement is planned as part of the FWA's post-2026 expansion. But the record-keeping obligation is in force right now. That means if an investigation opens in 2028, the FWA will ask for records going back to 2022. If those records do not exist, the gap becomes part of the case.
Unlike the older enforcement regime, there is no waiting for a disgruntled employee to make a complaint. The FWA is designed to identify sectors and business types at high risk of underpayment and go looking. Small businesses with a mix of working patterns, no dedicated HR function, and leave tracked on a spreadsheet are exactly the profile.
The cross-system problem no spreadsheet solves
Here is what compliant record-keeping actually requires for a business with mixed working patterns:
- Leave data: who took what, when, and whether it was paid or unpaid. Usually in a spreadsheet, or a standalone HR tool.
- Pay data: actual earnings per week, across 52 weeks. Usually at the payroll bureau or in payroll software.
- The calculation: the 52-week average for each irregular-hours worker, excluding zero-earnings weeks. This has almost certainly never been done in a structured way.
- The documentation: a written record of each calculation, per worker, per holiday period, stored in a format that survives six years of staff turnover and software changes.
Those four things sit across at least two systems, often three. No spreadsheet connects them. No standard payroll bureau output generates the documentation as a stored artefact the employer controls.
In a 15-person business, the MD is in client meetings. The finance person is managing payroll inputs. The payroll bureau is doing what it is asked to do. The holiday pay records UK requirement falls in the gap between all three, and nobody notices until the gap becomes a liability.
What the accountant answers and what the bureau builds
The employment law advisor or HR solicitor answers the regulatory question: what counts as adequate documentation for your specific worker types, whether any of your arrangements are edge cases, and how to interpret the Act's reference period rules for your situation. That is their work, not the bureau's.
The bureau's work starts where that answer ends.
For a business with this kind of mixed-hours team, the bureau builds the system that meets the holiday pay records UK standard without the owner having to think about it daily. That means: a script that pulls leave data from the HR tool or shared spreadsheet export, cross-references it against payroll data for the past 52 weeks, and runs the reference period calculation automatically for every irregular-hours worker. It generates a structured record per worker per holiday period, stored in a format the business controls directly. It flags any worker where the data is incomplete or the calculation looks inconsistent with previous periods. The whole process runs quarterly. The output is a report the person responsible for payroll compliance can review in 20 minutes, and a six-year retention archive that can answer an FWA data request without a last-minute search through three systems.
The cost of building this is a fraction of what it would cost to rehire the HR admin who used to own the spreadsheet. This is not something you can put together over a weekend. The 52-week calculation requires pulling and reconciling data from systems that were never designed to talk to each other. The retention format needs to survive software changes and staff turnover. The flagging logic needs to catch the edge cases before the FWA does.
Is this worth a conversation?
If your team has a mix of working patterns and your leave and payroll data live in different places, the 15-minute triage is the right starting point. A short conversation to map where the data is, what is missing, and whether a build makes sense for your team size.
If your operations week is already heavier than your customer week, that is worth talking about before the FWA's holiday pay enforcement expansion makes it urgent.