The Employment Rights Act has had three important updates that employers need to be aware of, including new requirements for how holiday pay is recorded, an increase to the mileage rate, and upcoming changes to Unfair Dismissal.
In this article we will discuss what these changes are and what they mean for employers in the UK.
1. Change to Holiday Keeping Records – Effective 6th April 2026
UK employers are now required to keep comprehensive records of:
- Any holiday employee(s) take
- How holiday pay has been calculated
These records can be recorded however the employer deems appropriate but must date back six years and include the following information:
- The amount of holiday taken (including any additional holiday taken)
- Any unused holiday carried forward to the next holiday period
- Any holiday pay and how it was calculated
- As an employer, what do I need to do?
You must keep a record of your employees’ holiday and ensure you can demonstrate how the holiday pay was calculated.
What happens if I don’t comply?
Failure to maintain adequate records will constitute a criminal offence and unlimited fine.
Support from Quartz Payroll
If you are a Quartz Payroll customer and you have questions about this change you can email us at hello@quartzpayroll.co.uk or call us on 020 3137 4408, we’ll be happy to help.
2. Mileage Rate Increase to 55p – 6th April 2026
The Government has increased the maximum mileage rate from 45p to 55p, effective from the 6th April.
If you are a Quartz Payroll customer, we will calculate mileage using this new government rate. If you wish to pay a different mileage rate, please contact the team.
3. Unfair Dismissal – 1st January 2027
From the 1st of January 2027, the qualifying period for Unfair Dismissal Employment Tribunal claims will be reduced from two years to six months. This means that from six months of employment, a ‘legally fair’ process must be followed before an employee is dismissed.
The compensation cap for Unfair Dismissal will also be removed resulting in uncapped financial compensation awards if an employment tribunal claim is successful.
To ensure compliance, we advise domestic staff employers to implement formal probation reviews for new employees and regular check-ins to assist with fair decision making.
How can Quartz Payroll help?
If you are a Quartz Payroll customer and you have questions about any of these updates you can email us at hello@quartzpayroll.co.uk or call us on 020 3137 4408, we’ll be happy to help.