01/09/2026
Zero-hours contracts are changing... is your business ready?
The biggest shake-up to zero-hours contracts in a generation is on the way under the Employment Rights Act reforms, and the Government estimates it will cost UK businesses around £2.9 billion a year.
If you use zero-hours workers in hospitality, health & social care or education, this is likely to affect you directly.
Here’s what’s coming and what I’d advise doing now.
What’s changing:
- employers will need to offer guaranteed hours to eligible workers, based on hours worked over a reference period (the Government’s current preference is 12 weeks).
- advance notice before shifts are confirmed, cancelled or changed, with compensation payable when this isn’t done.
- the eligibility threshold is still being consulted on (somewhere between 8 and 20 hours per week).
- reforms are expected to come into force in the second half of 2027, but from 1 January 2027, some zero-hours workers who are genuinely employees, could claim unfair dismissal after six months.
- non-compliance penalties could reach up to £20,000 per worker, enforced by the Fair Work Agency.
My top tips for business owners right now:
- scrutinise where, why and how you use zero-hours contracts. Is there a genuine need or just habit, or maybe fixed-term or temporary contracts may be a better fit for some roles.
- get your data in order, check how many zero-hours workers do you have and what hours are they actually working? Model 12, 26 and 52-week reference periods.
- don’t cut hours prematurely, reducing hours now without checking contracts could land you in breach.
Need help reviewing your contracts and ensure you’re ready for the changes?
As an HR consultant working with SMEs, care homes and charities across the South West, I can help you audit your current arrangements and put a plan in place before the rules are finalised. Drop me a message or comment below.
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