UK Contract Type Guide · 2026
How do UK zero hours contracts work in 2026?
Definition
A zero hours contract is one where the employer is not obliged to provide work and the worker is not obliged to accept it. The contract may exist as 'employment' (with full rights) or 'worker' status (with limited rights). True zero hours contracts give maximum flexibility but minimum security — both for employer and worker.
Rights and protections
Zero-hours workers (depending on whether classed as 'worker' or 'employee') have: National Minimum Wage; statutory holiday pay (5.6 weeks pro-rata); 11-hour daily and 24-hour weekly rest; 20-min break for shifts over 6 hours; protection from discrimination (Equality Act 2010); statutory sick pay if eligible; protection from unfair detriment for refusing work. Employees have all the above PLUS unfair dismissal protection (after 2 years), redundancy pay, statutory notice. Exclusivity clauses unenforceable for under-£123/week earners (since 2024).
Employer obligations
Pay at least National Minimum Wage for hours worked; calculate and pay holiday pay correctly (often ~12.07% uplift on basic pay); not impose exclusivity for low-earners; give statutory notice (1+ week if employee with 1 month+ service); not discriminate; provide written statement of particulars by day 1 (April 2020 change applies to all workers, not just employees).
Tax and pay implications
PAYE — employer deducts tax and NI before payment; National Insurance (employer + employee); no tax-free contractor benefits; holiday pay accrues at 5.6 weeks per year pro-rata. From the worker side: regular employment income for tax purposes.
Common use cases
Care, retail, hospitality, gig economy; seasonal demand; on-call cover; supplementary income; students; carers needing flexibility; people supplementing other income.
Worked example
Hannah worked zero hours at a care home — typically 25 hours/week but ranging from 0 to 40. Over 6 months her average was 28 hours. She accrued holiday pay at 5.6 weeks pro-rata of average hours worked. When the company tried to enforce an exclusivity clause (preventing her from taking a second job), she pointed out her earnings were £160/week — above the £123/week threshold so exclusivity was technically enforceable BUT the underlying arrangement wasn't supported by any business justification. She negotiated removal of the exclusivity and took a Saturday job at a coffee shop.
Recruiter pro tip
The Employment Rights Bill (effective 2026) will give zero-hours workers a right to be offered a guaranteed-hours contract reflecting the hours they've regularly worked over a reference period (likely 12 weeks). This is a major shift. Track your actual hours worked; once the right is in force, you'll have the option to convert to a guaranteed-hours contract while keeping your job. Many zero-hours workers will benefit from this transition.
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