The government crackdown on zero-hours contracts

If your business relies on zero-hours contracts, casual workers or temporary staff, significant changes to employment law are on the horizon. The Employment Rights Act 2025 introduces new rights designed to give workers greater certainty over their working hours, more notice of shifts and compensation when shifts are cancelled or changed at short notice.

For employers, these zero-hours contracts changes could affect how you plan rotas, manage staffing costs and organise your workforce.
The government has committed to ending what it describes as exploitative, one-sided flexibility. However, the intention is not to remove every form of flexible working. Workers who value the flexibility of a zero-hours arrangement will be able to retain it if they choose, while qualifying workers who regularly work consistent hours will gain new protections.

A government consultation on the detailed implementation of the reforms closed on 25 August 2026. Although the broad framework is established in legislation, important details still depend on regulations and final guidance. The new rights are planned for implementation during 2027, but employers should check the latest official timetable rather than assume a specific start date.

In this guide, we explain the zero-hours contracts changes, what they could mean for your business and the practical steps you can take now to prepare.

What are the zero-hours contracts changes?

The Employment Rights Act 2025 introduces three key measures aimed at making working arrangements more predictable for qualifying workers.

These are:

• The right to guaranteed hours: qualifying workers will be entitled to an offer of guaranteed hours reflecting the hours they have worked over a specified reference period.
• The right to reasonable notice of shifts: qualifying workers will be entitled to reasonable notice of when they are expected to work, including relevant changes to their schedules.
• The right to payment for short-notice changes: qualifying workers will be entitled to compensation in certain circumstances when shifts are cancelled, moved or cut short at short notice.

The reforms also cover qualifying agency workers, although the way the rights apply can differ depending on the working arrangement.

These measures are intended to address situations where workers regularly work a predictable pattern but have no contractual guarantee of hours, or where shifts are changed at short notice with little protection against lost income.

For employers, the changes mean that zero-hours arrangements may require closer review. If someone consistently works similar hours every week, you may need to offer a contract reflecting that pattern once the new rules apply.

Importantly, the reforms do not mean every zero-hours contract will automatically become a guaranteed-hours contract. Eligibility will depend on the detailed statutory requirements, and workers will have a choice about whether to accept a qualifying offer.

1. The right to guaranteed hours

One of the most significant zero-hours contracts changes is the introduction of a right to be offered guaranteed hours.

Under the new framework, qualifying workers will be entitled to receive an offer of guaranteed hours that reflects the hours they have worked during a reference period.

The aim is to ensure that contractual arrangements better reflect regular working patterns, rather than leaving people without guaranteed hours when their actual working arrangements are relatively consistent.

How will guaranteed hours work?

Imagine you run a hospitality business and employ several casual workers to cover busy periods.

One worker is contracted on a zero-hours basis but regularly works around 25 hours per week. Although the contract does not guarantee any hours, your rotas show that the worker has consistently been scheduled for similar shifts.

Under the new rules, that working pattern could mean the worker qualifies for an offer of guaranteed hours, depending on the final eligibility criteria and reference-period rules.

The offer would need to reflect the hours the worker has worked in accordance with the applicable requirements.

The same principle could apply to businesses in retail, care, manufacturing, events and other sectors where casual staff regularly cover predictable shifts.

Will every zero-hours worker receive guaranteed hours?

No. The new right will apply to qualifying workers rather than automatically covering every person engaged on a zero-hours contract.

The detailed rules will determine matters such as the reference period, minimum-hours threshold, regularity of work and how guaranteed hours are calculated.

The government has consulted on an initial reference period of 12 weeks, alongside alternatives of 26 and 52 weeks. It has also considered a threshold within a range of eight to 20 hours per week.

These figures should not be treated as final requirements until the relevant regulations confirm them.

For employers, this distinction matters. A worker who picks up occasional, irregular shifts may be in a different position from someone who works a consistent pattern every week.

However, it would be unwise to assume that a worker falls outside the rules simply because their hours vary. The final criteria will determine how patterns of work are assessed.

Can a worker refuse a guaranteed-hours offer?

Yes. The framework allows qualifying workers to reject an offer of guaranteed hours and remain on a zero-hours arrangement if they wish.

This is an important part of the reforms. Some people actively choose flexible working because it fits around study, caring responsibilities, another job or other commitments.

The intention is to give workers greater security where their working patterns justify it, without removing their ability to choose a more flexible arrangement.

Employers should therefore avoid assuming that every worker will want a guaranteed-hours contract. Clear communication will be important when offers are made.

2. New rules on shift notice and scheduling

The second major change concerns how much notice workers receive about their shifts.

For some businesses, flexible scheduling is essential. Customer demand can change, seasonal peaks can affect staffing requirements, and unexpected absences may require employers to find cover.

However, flexibility for the business can create uncertainty for workers if they are regularly told about shifts at the last minute.

The new framework introduces a right to reasonable notice of shifts for qualifying workers, with the detailed requirements to be set out in regulations.

This is intended to help workers plan their time and manage their finances, while giving employers a clearer framework for scheduling work.

What counts as reasonable notice?

The precise requirements will depend on the regulations and the circumstances covered by the legislation.

The framework provides for rules establishing when notice will be presumed reasonable, together with considerations that may be relevant when assessing whether the notice given was reasonable.

This means employers should not assume that simply sending a shift notification shortly before work begins will always satisfy the new requirements.

For example, imagine a retail business regularly publishes its rota only a day or two before shifts begin. Employees may struggle to arrange childcare, manage transport or coordinate other commitments.

A more structured scheduling process could help the business provide greater predictability while still allowing for changes where necessary.
What about changes to existing shifts?

The reforms also address reasonable notice when shifts are cancelled or changed.

If an employer has already scheduled a worker and subsequently changes the arrangement, the employer will need to consider the applicable notice requirements.

This may affect businesses that routinely move shifts between days, reduce scheduled hours or alter start and finish times.

Employers should review how rota changes are communicated and whether managers have a consistent process for recording them.

A clear process can also help resolve disagreements about when a shift was changed, what notice was provided and whether the worker had already agreed to the arrangement.

How can you improve your rota process?

Start by examining how far in advance shifts are usually communicated.

Consider whether your scheduling process gives workers enough notice, who is authorised to change a rota and how changes are recorded.
If rotas are currently managed through informal messages or different systems across departments, it may be worth introducing a more consistent approach.

Managers should also understand that changes to shifts may have financial consequences under the new framework. They will need to consider the appropriate process before cancelling or altering scheduled work.

The aim is not necessarily to remove flexibility from your business. It is to plan work more predictably and manage changes responsibly.

3. Compensation for shifts cancelled or shortened at short notice

The third major change introduces a right to compensation in certain circumstances when shifts are cancelled, moved or cut short at short notice.

For workers who depend on variable hours, a cancelled shift can mean an unexpected loss of income. It can also leave them having turned down other opportunities or made arrangements that cannot easily be changed.

The new rules are intended to provide greater protection in these situations.

For employers, this means that cancelling a shift may have a cost beyond the immediate operational inconvenience.

When might compensation be required?

The statutory framework establishes the right to payment for qualifying short-notice changes. The detailed regulations will determine important aspects of how the entitlement works, including the relevant notice periods and compensation arrangements.

Employers should not assume that every cancelled shift will automatically trigger the same payment. The circumstances and final rules will matter.

For example, a business might schedule a worker for an eight-hour shift and later discover that demand has fallen.

If the business cancels the shift shortly before it is due to begin, the new rules may require compensation if the relevant conditions are met.

Similarly, reducing the length of a scheduled shift or moving it to another time could have implications under the statutory framework.

Why could this affect staffing costs?

Businesses that regularly adjust rotas at short notice may need to review how they forecast staffing requirements.

If managers frequently schedule more workers than are likely to be needed and cancel shifts when demand falls, the business could face additional costs once the rules apply.

That does not mean every employer must eliminate last-minute changes. Unexpected events will still happen.

However, better forecasting, clearer approval processes and earlier communication may help reduce unnecessary cancellations.

What should employers review?

Look at how often scheduled shifts are cancelled, moved or shortened, and consider why those changes happen.

Are they mainly caused by unpredictable demand, poor forecasting, late management decisions or communication problems?

Understanding the reasons can help you identify improvements before the new requirements take effect.

You should also review how changes are recorded and consider how payroll will process any compensation that becomes payable.

Once the final regulations are available, update your policies and manager guidance to reflect the precise requirements.

How to prepare your business for the new rules

You do not need to wait for every detail to be confirmed before reviewing your current arrangements. There are several practical steps you can take now.

Step 1: Audit your zero-hours and casual workforce

Create a list of workers engaged on zero-hours contracts, casual agreements and other arrangements involving variable hours.

Review their working patterns using rotas, timesheets and payroll records.

Where possible, look at a period long enough to identify whether their hours are regular, seasonal or genuinely unpredictable.

The government’s final reference-period and eligibility rules will determine which records are relevant, so avoid assuming that one 12-week review will settle the question.

Step 2: Identify potentially qualifying workers

Look for workers who regularly work a similar number of hours each week despite having no contractual guarantee.

Record the patterns you identify and consider how guaranteed hours could affect your staffing arrangements.

This is an initial assessment rather than a final determination of eligibility. The statutory thresholds, regularity criteria and calculation method will need to be checked against the final regulations.

Step 3: Review your contracts and policies

Check your existing contracts, casual-worker agreements and agency arrangements.

Consider whether the wording accurately reflects how work is offered, accepted and scheduled.

You should also review policies covering rotas, shift changes, cancellations and communication with workers.

Once the detailed rules are confirmed, update your documents to reflect the new requirements.

Step 4: Improve workforce planning

If your business relies on last-minute scheduling changes, consider whether better forecasting could reduce the need to cancel or shorten shifts.

Look at historical demand, seasonal patterns, staffing levels and the reasons shifts are regularly changed.

Improved planning can help you balance operational flexibility with greater predictability for workers.

Step 5: Prepare managers and payroll

Managers will need to understand how the new rules affect their decisions.

Provide guidance on giving notice, recording shift changes and escalating questions about guaranteed-hours offers.

Payroll teams should also be involved in planning for any compensation payments and related record-keeping requirements.

Step 6: Monitor the implementation timetable

The detailed rules are being developed through secondary legislation following the government’s consultation.

Keep track of official announcements and update your preparation plan as the requirements become clearer.

The government has indicated that the new rights will be introduced during 2027, but the exact implementation date should be confirmed against the latest official timetable.