Zero-hours contracts: what are the proposed changes?
Monday 22nd June 2026
On 2 June 2026, the government published a consultation paper on the Regulations needed to bring the zero-hours measures in the Employment Rights Act 2025 (ERA) into force.
The government does not propose to ban zero-hours contracts altogether. Instead, it says the aim is to end “one-sided flexibility”. The main proposed changes are set out below.
The right to guaranteed hours
A worker will qualify for the right to guaranteed hours if they are on a zero-hours contract, or have guaranteed hours below the relevant threshold, and in practice regularly work above that level during the ‘reference period’. Qualifying workers must be offered hours reflecting their actual working pattern, which they may accept or decline.
For workers who have some guaranteed hours, the government’s preferred threshold is 8 to 20 hours a week, which it considers most likely to balance worker protection against employer cost and administrative burden.
Reference period
The government’s preferred starting point for assessing normal working hours is a 12-week period, which it considers long enough to give a reliable indication of usual hours without unduly delaying access to the right. It is also consulting on longer options of 26 or 52 weeks.
Views are also sought on whether subsequent reference periods should run continuously or with breaks, an issue that will affect employers’ record-keeping and administration.
Regularity test
To qualify, a worker must have worked with sufficient regularity during the reference period. The consultation offers two tests. Option A looks only at the number of weeks worked. Option B also requires a minimum number of hours worked above contract.
The latter option sets a higher bar, so occasional overtime alone would not be enough, which favours employers.
How guaranteed hours are calculated
The consultation asks whether guaranteed hours should be based on a mean or median average. Mean treats all weeks equally, while a median reduces the impact of unusually high or zero-hours weeks.
The consultation also asks whether employers should have a small adjustment margin to reflect normal shift lengths or minor calculation errors.
Reasonable notice of shifts
Qualifying workers must be given reasonable notice of shifts and any changes. The Regulations will set a benchmark period of what is “reasonable” for tribunals, with employers needing to justify shorter notice and workers needing to justify claims that longer notice was still unreasonable.
The consultation suggests notice periods from 1 to 4 weeks for directly engaged workers and from under 5 days to 4 weeks for agency workers. A failure to give reasonable notice could result in an employment tribunal claim, with compensation awarded for loss.
Payment for cancelled, moved or curtailed shifts
Workers will be entitled to a payment if a shift is cancelled, shortened or moved at short notice. The consultation considers notice periods of between 1 and 7 days, and also asks whether a higher payment should apply where notice is especially short.
The payment would be a percentage of earnings, based either on the worker’s pay for the shift or on the National Living or Minimum Wage. For agency workers, agencies would make the payment and recover it from hirers in prescribed cases. No payment would be due if the worker requested the change, failed to attend or chose to swap the shift. The consultation also asks whether exceptions should apply, for example in cases of extreme weather.
Seasonal and temporary work
No guaranteed hours offer is required where a worker is employed under a reasonable limited-term contract shorter than the reference period. Under the ERA, that will be the case where the worker is needed only for a specific task that will end, until a specified event occurs or does not occur, or to meet a ‘temporary need’ to be defined in the Regulations. The government is concerned that the first two categories may not capture seasonal demand and is consulting on whether ‘temporary need’ should be defined more widely.
Agency workers
Hirers would usually be responsible for making guaranteed hours offers, though the consultation asks whether that duty should in some cases fall to agencies or intermediaries.
Enforcement
Short-notice payments would be enforceable by the new Fair Work Agency (established in April 2026) under the Notice of Underpayment regime, as well as in employment tribunals, because non-payment is a clear and measurable breach.
By contrast, claims about guaranteed hours and reasonable notice would remain matters for tribunals alone as they require further analysis.
The proposed penalty for non-compliance with notice payments is 50% of arrears owed, with a minimum of £100 per case and a maximum of £5,000 per worker.
What does this mean for employers?
Although these are still only proposals, employers using zero-hours or low-hours contracts should start considering the operational impact now.
Key issues include how working hours and patterns are recorded, how shifts are scheduled and notified, which workers may qualify for guaranteed hours, and the proposed ‘temporary need’ exception.
Employers affected by these proposals can find out more about them and the consultation – here. The consultation closes on 25 August 2026.
If you would like to discuss how these proposals may affect your business, please get in touch with a member of the Employment team.
