Zero-Hours Contract Changes 2026: Employer Guide to the New Rules

Zero-hours contracts are not being abolished in 2026, but the way employers use them is moving towards much greater scrutiny. The Employment Rights Act 2025 has established a new framework that will eventually give qualifying zero-hours and low-hours workers rights to guaranteed hours, reasonable notice of shifts, and payments when shifts are cancelled, moved or cut short at short notice.

Those new rights aren't yet in force. The government’s detailed consultation closed on 25 August 2026, and the secondary regulations that will determine important details haven't been finalised. The government currently expects the new zero-hours measures to take effect during 2027, with exact timings to be confirmed following consultation.

However, something important happened three days after the consultation closed. On 28 August 2026, the government published new guidance specifically for employers using zero-hours contracts. It tells employers to give workers as much notice as possible when offering work, explain clearly how work will be offered, avoid cancelling shifts at the last minute and make cancellation reasons and any compensation arrangements clear.

The guidance also asks employers to think carefully about whether a zero-hours arrangement is genuinely appropriate. Where work is regular and predictable over a continuous period, alternatives such as permanent part-time or fixed-term employment may be more suitable.

These requirements are currently guidance rather than the final statutory rules, but they give HR leaders a clear indication of where workforce scheduling practice is heading.

Shortcuts

• Zero-hours contracts are not being banned outright
• Why is the government changing zero-hours contracts?
• The right to guaranteed hours will change what employers need to track
• Start comparing contracted, scheduled and actual hours
• Reasonable notice of shifts will make rota history important
• Shift cancellations will carry a financial consequence
• What employers should already be doing under current zero-hours guidance
• Temporary and seasonal work will need careful treatment
• Agency workers cannot be ignored
• Zero-hours reform is really a workforce planning challenge
• How HR Duo supports zero-hours changes

What changed with zero-hours contracts in 2026?

The short answer is that the legal framework has been created, consultation on the detailed rules has finished, and employers have now been given clearer guidance on how zero-hours work should be managed before the new statutory rights take effect. The Employment Rights Act 2025 introduces three significant protections:

• A right to guaranteed hours. Qualifying workers will need to receive an offer reflecting the hours they regularly worked during a reference period.

• A right to reasonable notice of shifts. Employers will need to give qualifying workers reasonable notice of shifts and relevant changes.

• A right to payment when shifts change at short notice. Eligible workers will be entitled to payment when an employer cancels, moves or cuts short a qualifying shift within the statutory short-notice period.

The legislation also extends important elements of these protections to agency workers.

What employers don't have is the complete rulebook. Secondary legislation still needs to define several critical parameters, including exactly which low-hours contracts qualify, how reference periods operate, what level of notice creates a presumption of unreasonable notice and how short-notice payments will be calculated.

Employers should prepare for the direction of reform without presenting proposals from the consultation as settled law.

Zero-hours contracts are not being banned outright

The government frequently describes its policy as ending “exploitative zero hours contracts”. That doesn't mean every zero-hours arrangement will become unlawful.

Some employees actively value the ability to choose whether to accept work. Students, people combining employment with caring responsibilities and some semi-retired workers may prefer arrangements without fixed weekly hours.

The government has explicitly said that workers who prefer zero-hours arrangements will be able to remain on them. The guaranteed-hours framework creates an entitlement to an offer, rather than forcing every qualifying person to accept fixed hours.

That distinction should shape how employers approach reform. The objective isn't to remove flexibility, it's to reduce one-sided flexibility, where the employer retains the freedom to change hours at very short notice while the worker carries the financial and practical consequences.

This is particularly relevant in industries where labour requirements genuinely fluctuate.

• Healthcare providers need sickness cover.

• Manufacturers may need additional labour when production demand changes.

• Construction and engineering businesses may need workers across changing projects and sites.

The issue is whether flexibility works reasonably for both sides and whether employers can demonstrate how those decisions were made.

Why is the government changing zero-hours contracts?

Zero-hours contracts remain a significant part of the UK labour market. More than one million people work on them, and their use remains particularly concentrated in lower-paying occupations.

The debate isn't about whether workers have guaranteed hours, as predictability matters too.

Research published to support the 2026 consultation found that many workers in insecure employment receive relatively little advance notice of their working hours. Short notice can make it harder to arrange childcare, travel, education or additional employment.

Cancellation creates another problem. A worker may have already paid for transport or childcare before being told that a shift is no longer required. Government analysis has also identified wider financial costs associated with insecure and unpredictable working.

At the same time, the evidence isn't entirely one-sided. Some workers value zero-hours arrangements because they can choose when they work, while employers in sectors with changing demand argue that flexible arrangements remain operationally important.

That's why the reforms focus heavily on predictability and choice rather than simply prohibiting the contract type.

The right to guaranteed hours will change what employers need to track

The guaranteed-hours provision is likely to create one of the biggest administrative changes. Under the Employment Rights Act framework, employers will have a duty to make guaranteed-hours offers to qualifying workers following relevant reference periods.

The offer must reflect the hours worked during that period. Regulations may also require it to reflect when those hours were normally worked, including days, times or working patterns.

The government has indicated that it expects the initial reference period to be 12 weeks. This is the government’s current policy expectation, but it's not yet the final statutory reference period. Regulations following consultation will confirm the detail.

That distinction is important for HR teams preparing their processes. A 12-week period provides a useful basis for analysing current workforce patterns, but employers should not hard-code their future compliance process around it until the final regulations are published.

The consultation has also examined how low-hours workers should qualify. Government analysis identified a preferred range of between 8 and 20 guaranteed hours per week for the future qualifying threshold. Again, that is a preferred policy range rather than a final legal threshold. The regulations will determine which low-hours workers ultimately fall within scope.

This means employers should be careful about focusing only on people whose contracts literally state “zero hours”.

Workers with a small number of guaranteed contractual hours who regularly work considerably more could also fall within the future regime.

That creates an important workforce-data challenge. An employer may need to establish what someone was contractually guaranteed, what they actually worked, whether those hours were sufficiently regular and what working pattern emerged during the relevant reference period.

For a business managing hundreds or thousands of hourly paid workers, this cannot sensibly depend on someone opening individual timesheets every few months.

Start comparing contracted, scheduled and actual hours

One of the most useful things employers can do now is begin examining three different figures.

1. Contracted hours tell you what the organisation has formally committed to provide.

2. Scheduled hours tell you what managers expected the worker to work.

3. Actual hours tell you what happened.

The difference between those numbers will become increasingly important.

Imagine a healthcare employee contracted for eight hours each week who has worked between 25 and 30 hours almost every week for several months.

The contractual record suggests a highly flexible arrangement, the working record suggests something much closer to a regular requirement. The future guaranteed-hours regime is designed specifically to address situations like this.

The same problem can occur in manufacturing when an employee repeatedly covers the same production shifts, or in construction where a supposedly casual worker continues working predictable hours on a long-running project.

Employers need visibility of these patterns before the regulations arrive.

Reasonable notice of shifts will make rota history important

The second major reform concerns shift notice. The Act will give qualifying workers a right to reasonable notice of a shift and reasonable notice when that shift changes or is cancelled.

What constitutes “reasonable” will depend on the circumstances.

The legislation allows regulations to create a minimum timeframe below which notice will be presumed unreasonable unless the employer can show otherwise.

Importantly, the Employment Rights Act places an upper limit on how the separate short-notice period for cancellation, movement or curtailment payments can ultimately be defined. Regulations cannot set that period at more than seven days. The 2026 consultation considered different possible periods within that limit, but the final timeframe has not yet been decided.

The explanatory material around reasonable notice also illustrates why employers should not assume that meeting a future numerical threshold will always be sufficient.

Even where a particular amount of notice falls outside a statutory presumption, the circumstances could still matter when assessing whether notice was reasonable.

Equally, there will be circumstances where short notice may be reasonable.

• A healthcare provider may need emergency sickness cover.

• A manufacturer could experience an unexpected production requirement.

• A construction business may have a genuine project change.

The important implication for HR leaders is that the eventual requirement will involve more than publishing rotas earlier. Employers may need evidence showing when a shift was first offered, when the employee accepted it, when it changed, who changed it and potentially why the change was required.

Shift cancellations will carry a financial consequence

The third element deals with cancelled, moved and curtailed shifts. Once implemented, employers will need to make statutory payments when qualifying shifts are changed within the defined short-notice period, subject to the final rules and exceptions.

The amount and precise relevant timeframe are still to be set through regulations. However, employers should already consider the administrative implications.

If a shift is cancelled, the organisation may eventually need to establish when it was originally scheduled, when the worker agreed to it, when the cancellation occurred and whether the circumstances create an entitlement to payment.

If a shift is shortened, the business may need a record of the original hours and the revised hours. If it's moved, the system needs to retain the original schedule rather than simply overwriting it.

That last point is particularly important. Many organisations manage rotas in spreadsheets or systems where the latest version replaces the previous version.

That may show what employees are working today. It doesn't necessarily provide an audit trail showing how the schedule changed.

What employers should already be doing under current zero-hours guidance

While the new guaranteed-hours, shift-notice and cancellation-payment rights are not yet in force, the government has now set clearer expectations for employers using zero-hours contracts.

The guidance published on 28 August 2026 states that employers should give workers as much notice as possible when offering work and be clear about how those offers will be made. Employers should also avoid cancelling work at the last minute and explain why work might be cancelled and what compensation, if any, may be available.

The guidance goes further than scheduling practice. Employers should make contracts clear about the nature of the arrangement, including employment status, how work will be offered and, where relevant, how the contract can be ended.

When advertising a zero-hours role, employers should make clear from the outset that the role doesn't provide guaranteed hours.

The government also advises employers to consider whether a zero-hours contract is genuinely the most appropriate arrangement. Zero-hours contracts can be suitable where demand is irregular, where work is genuinely casual or where employers need occasional workers to cover short-term or unexpected requirements. They may be less appropriate where an individual works regular hours over a continuous period and the organisation can reasonably predict that those hours will continue.

In those circumstances, alternatives such as permanent part-time employment, fixed-term contracts, annualised hours or offering overtime to existing employees may better reflect the organisation's actual workforce requirement.

Employers should also review the wider employment arrangement. Zero-hours status doesn't remove statutory employment rights, and individuals may have employee or worker status depending on the reality of the relationship. Contracts shouldn't prevent zero-hours workers from looking for or accepting work elsewhere.

For HR leaders, this makes the review wider than preparation for future legislation. It's an opportunity to identify where contractual flexibility still reflects a genuine workforce requirement and where working patterns have become sufficiently predictable to warrant a different arrangement.

The practical questions are therefore worth asking now.

• Are workers receiving rotas as early as operationally possible?

• Do managers use one consistent process when offering additional shifts?

• Can workers clearly understand whether they are required to accept work?

• Are shift cancellations being recorded?

• Do employees understand why shifts may be cancelled?

• Are some zero-hours employees effectively working a regular and predictable schedule?

• Do current contracts still reflect how people actually work?

The answers can improve current workforce management while also preparing the organisation for the new statutory framework.

Temporary and seasonal work will need careful treatment

Not every period of regular work will automatically require a permanent guaranteed-hours arrangement. The Employment Rights Act framework recognises that employers may have genuinely temporary workforce requirements.

The 2026 consultation specifically considered limited-term contracts and seasonal demand.

Where a limited-term contract lasts for less than the relevant reference period, an employer may not need to make a guaranteed-hours offer where it was reasonable to use a limited-term arrangement for genuinely temporary work. The consultation uses temporary tasks, events and seasonal fluctuations as examples of the circumstances the final regulations need to address.

The detailed definition of a wider “temporary need” hasn't been finalised.

This is important for sectors such as manufacturing, healthcare, construction, hospitality and retail, where genuine seasonal or project-based workforce requirements exist. HR teams should avoid assuming that every temporary increase in hours will create the same obligation.

But the reverse is also important. Calling work “temporary” will not necessarily make it temporary if the organisation has an ongoing and predictable workforce requirement.

A manufacturer bringing in additional workers for a defined Christmas production peak may be in a very different position from one using the same low-hours employees for effectively full-time shifts throughout the year.

A construction company employing someone specifically for a defined stage of a project may also have a clearer temporary requirement than one repeatedly moving the same worker between long-running projects without reviewing their contractual arrangement.

Employers should start documenting the reason for limited-term and seasonal arrangements rather than relying on the contract label.

The 28 August employer guidance matters before the new law takes effect

The government's new guidance is useful because it gives employers something practical to work with now. It states that employers should provide as much notice as possible when offering work and remain clear about how those offers are made.

It also says employers should avoid cancelling work at the last minute and explain both the reasons work may be cancelled and what compensation may be available.

These are not yet the statutory guaranteed-hours and shift-notice requirements, but they establish a clear direction for good workforce management.

Employers that begin adopting these principles during 2026 will be better positioned when detailed regulations arrive.

Agency workers cannot be ignored

One potential response to restrictions on zero-hours contracts would be to increase reliance on agency labour and contractors.

The government has anticipated that risk. The Employment Rights Act extends guaranteed-hours and shift-related protections to qualifying agency workers.

Under the government’s approach, the end hirer carries the default responsibility for making the guaranteed-hours offer to a qualifying agency worker, subject to the detailed rules and any exceptions eventually set through regulations.

The position becomes more complex for shift notice. Both agencies and hirers can have responsibilities relating to reasonable notice because either party may control different parts of the communication and scheduling process. The statutory framework allows responsibility to reflect which party was responsible for the failure.

Short-notice cancellation payments are treated differently again. The government’s approach places responsibility for making the payment to the agency worker with the agency, reflecting the agency’s existing role in paying wages. Arrangements can then address the recovery of those costs from the hirer where the hirer was responsible for cancelling or curtailing the shift.

Further regulations will determine how these responsibilities operate in practice.

For employers using significant agency labour, this makes procurement and contract management relevant to zero-hours reform.

HR leaders should understand not only how many agency workers the organisation uses, but how regularly the same individuals work for the business and which party controls their working pattern.

A worker supplied as temporary cover who works occasionally presents a different position from an agency worker who has effectively filled the same regular rota pattern for several months.

The employment model may differ, but the workforce data still needs to make that distinction visible.

Zero-hours reform is really a workforce planning challenge

It would be easy to treat these changes as another contract-update exercise, but that would miss the bigger issue.

Future compliance will depend heavily on operational information.

• HR needs contractual data.

• Operations controls the rota.

• Employees create attendance data.

• Payroll holds records of what was ultimately paid.

• Managers know why shifts changed.

• Agency information may sit somewhere else again.

If these records are disconnected, demonstrating compliance becomes significantly harder. Consider the seemingly simple question:

How many hours has this worker regularly worked during the reference period?

In a fragmented business, answering it may require an HR administrator to find the contract, download timesheets, compare rota spreadsheets, check absence and investigate payroll records. Now multiply that process across several hundred zero-hours and low-hours workers.

The new regime therefore makes the business case for connected Workforce Management Software much stronger.

What should employers do before the regulations are finalised?

There's no need to rewrite every zero-hours contract based on consultation proposals that could still change. There is, however, plenty employers can do now. A useful preparation programme should include:

1. Identify every zero-hours, casual, agency and low-hours worker. Don't rely on contracts labelled “zero hours”.
2. Compare guaranteed hours with actual hours worked. Look for employees consistently working well above their contractual commitment.
3. Review whether the contract still reflects reality. Where work has become regular and predictable, consider whether a part-time, fixed-term or another contractual arrangement would be more appropriate.
4. Review how far ahead rotas are normally published. Measure this by location or department rather than assuming one company-wide practice.
5. Start retaining rota changes. Record when shifts are offered, accepted, changed, cancelled or shortened.
6. Review cancellation practices. Establish why cancellations occur, who can authorise them and whether the business currently offers any compensation.
7. Audit agency-worker patterns. Identify agency workers who repeatedly work regular hours for the same part of the organisation and establish whether the agency or hirer controls each part of the scheduling process.
8. Review temporary and seasonal arrangements. Document why limited-term working is necessary and whether the underlying workforce requirement is genuinely temporary.
9. Train managers on better scheduling practice. The manager making a last-minute rota change may ultimately create the compliance obligation.

The objective isn't to predict every detail of the secondary legislation, it's to understand whether your current processes can support whatever final parameters emerge.

Contract Management Software needs to do more than store the contract

A document management system can store a zero-hours contract, but that doesn't mean it can manage the working relationship. Employers preparing for the 2027 reforms need to think about the information surrounding the contract.

• Can you see contractual hours alongside actual hours?

• Can managers publish rotas centrally?

• Can employees see upcoming shifts?

• Can the organisation retain records when a rota changes?

• Can HR identify repeated working patterns?

• Can leave and absence be separated from hours simply not offered?

• Can temporary and seasonal arrangements be identified?

• Can agency-worker patterns be reviewed?

• Can payroll access accurate worked-hour information?

• Can managers follow the same scheduling and approval process across every site?

These are workforce-management questions rather than document-management questions. They're also exactly where future HR Compliance obligations are heading.

How HR Duo supports zero-hours changes

HR Duo brings the employment record and day-to-day workforce operation together within one HRMS. That's particularly important for organisations managing zero-hours and variable-hours workers.

• Central Employee Profiles and Digital Contracts give HR a controlled record of employment terms and working arrangements.

• Digital Rotas and Shift Scheduling give managers one place to plan and communicate work across teams and locations.

• Time Tracking records the hours employees actually work through mobile, geofenced, QR, biometric, tablet and other supported clocking methods.

• Leave and Absence Management provides additional context when analysing variations in working patterns.

• Workforce reports help HR and operational leaders examine working hours and patterns across the organisation.

• Payroll reporting and processing connect worked-hour information more closely with the eventual pay outcome.

• HR Intelligence provides access to approved HR guidance, policies, letters and employment workflows while keeping company information and permissions within the HR Platform.

Together, these capabilities create the underlying workforce record employers will increasingly need as zero-hours regulation moves towards implementation. HR Duo doesn't need to predict whether the final statutory reference period will remain 12 weeks, where the low-hours threshold will ultimately be set or how the final cancellation-payment calculation will operate.

The important capability is having accurate, accessible data so that the rules can be applied consistently once those details are confirmed.

Preparing for guaranteed hours requires better workforce visibility

The zero-hours reforms represent a wider change in how employers will need to think about workforce flexibility.

The contract will remain important, but the reality of the working relationship will become increasingly visible.

• If a worker is consistently scheduled for the same hours, employers need to know.

• If managers regularly cancel shifts at short notice, HR needs to see the pattern.

• If one location routinely gives workers two weeks' notice while another gives them 24 hours, leaders need visibility of that difference.

• If agency workers become embedded into permanent rotas, the organisation should be able to identify it.

• If an arrangement is described as temporary but the same workforce requirement continues throughout the year, HR should be able to question whether the contract still reflects reality.

A connected HRMS makes those questions easier to answer. For HR leaders, this is the opportunity within the reform. Preparing for the new rules can improve rota planning, labour visibility, payroll accuracy and employee experience before the legislation even takes effect.

The employers best prepared for 2027 will not be those waiting for the final regulations before taking action, they will be those already creating clearer working patterns, better scheduling practices and more reliable workforce records.