WFM UK | HR & Payroll: Employment Rights Act 2025: The Zero Hours Consultation - Detailed Guide to Responding

Overview

The Employment Rights Act 2025 received Royal Assent in December 2025 and introduced three significant new rights for workers on zero hours and low-guaranteed hours contracts. However, the detail of how these rights will work in practice has not yet been finalised. The government is currently consulting on the regulations that will bring these measures into effect, and your views genuinely matter.

This guide is designed to help you understand what the consultation is asking and what the potential implications are for your business. It is not designed to influence how you respond – that is entirely your decision. What it will do is help you prepare to engage with the consultation thoughtfully and make sure your voice is heard.

Note: Please set aside around 3 hours to complete this consultation. It is detailed, technical in places, and covers 64 questions across three sections.

Deadline: The consultation closes on 25 August 2026. Responses can be submitted at Make Work Pay: ending one-sided flexibility – reforms of zero hours and similar contracts - GOV.UK

The Three New Rights – An Overview

Before working through the consultation questions, it helps to understand the three rights the government has legislated for. The consultation is not asking whether these rights should exist – that is already law. It is asking how they should be designed and what detail of the regulations should look like.

The Right to Guaranteed Hours

If a worker is on a zero hours contract or a contract guaranteeing them fewer hours than a certain threshold and they have regularly worked more hours than their contract specifies over a set period of time (called a reference period), their employer will be required to offer them a new contract reflecting the hours they have actually been working.

The worker can accept or decline this offer. They are not forced to take guaranteed hours if they prefer to remain on their current flexible arrangement.

The Right to Reasonable Notice of Shifts

Employers will be required to give eligible workers reasonable notice of their shifts and of any changes to those shifts. The consultation is seeking views on what 'reasonable' means in practice, recognising that this will be dependent on circumstances.

The Right to Payment for Short Notice Cancellations, Movements and Curtailments

If an employer cancels, moves or shortens a shift at short notice, they will be required to make a payment to the worker. The consultation is seeking views on what counts as 'short notice' and how much the payment should be.

Note: These rights apply to workers below a certain hours threshold – the exact threshold is one of the things the consultation is asking about. Workers who already have a sufficient number of guaranteed hours will not be in scope.

Part 1: The Right to Guaranteed Hours

This is the most complex part of the consultation and covers the majority of the questions. It asks you to think carefully about how the guaranteed hours framework should be designed, including who it applies to, how qualifying hours are calculated, and when offers need to be made.

The Hours Threshold

The consultation asks what the maximum number of contracted hours should be for a worker to be in scope of the right to guaranteed hours. Workers already guaranteed more than this threshold will not qualify.

The government's preferred range is 8 to 20 hours per week. The questions ask you to choose from options ranging from 8 to 48 hours, or to suggest another figure.

Things to consider:

• How many of your workers are on contracts guaranteeing fewer than 8, 12, 16 or 20 hours? Understanding this will help you assess the potential scale of impact.
• A lower threshold means fewer workers are in scope and fewer guaranteed hours offers need to be made.
• A higher threshold brings more workers into scope, offering more income security for those who may need it.
• Consider whether a higher threshold might change how you structure your job offers in future – and whether that would be in the interest of your workers.
• There is a separate question about the threshold for agency workers, which the consultation acknowledges may be set differently to reflect the different nature of agency work.

The Reference Period

The reference period is the window of time an employer looks back over to assess whether a worker qualifies for a guaranteed hours offer. At the end of the reference period, the employer calculates the hours the worker averaged during that period and uses this to determine what hours should be offered.

The government's preferred initial reference period is 12 weeks, but the consultation offers options of 12, 26 and 52 weeks.

Things to consider:

• A shorter reference period means workers get an offer sooner, but the calculation may be based on an unrepresentative snapshot of their hours – for example, if they were assessed during a busy Christmas period.
• A longer reference period gives a more accurate picture of a worker's typical hours over time, particularly in businesses with significant seasonal variation.
• Think about how your trading patterns fluctuate across the year and whether a short reference period would produce a fair and sustainable guaranteed hours figure for your business.
• The consultation also asks about subsequent reference periods – the periods that follow the initial one. At the end of each subsequent period, the employer must assess again whether the worker qualifies for an updated offer. Consider how frequently this process is manageable for your business.
• There is also a question about whether subsequent reference periods should start immediately after the previous one ends, or whether there should be a gap. A gap reduces the administrative burden and avoids peak period hours being continuously rolled forward into the next calculation.

Note: Under the current proposals, guaranteed hours can only increase through subsequent reference periods – they cannot be reduced without the worker's agreement. Think carefully about whether a guaranteed hours offer made after a peak period would be sustainable for your business in quieter periods.

Regulatory Requirements

Not every worker who is below the hours threshold will automatically qualify for a guaranteed hours offer. To qualify, the worker must also have worked with sufficient regularity during the reference period. The consultation asks about two approaches.

• Option A: The worker must have worked in a minimum number of weeks during the reference period (a weekly distribution requirement only).
• Option B: The worker must have worked in a minimum number of weeks AND have worked a minimum number of hours above their contracted hours (a dual test).

The consultation then asks separately what the specific thresholds for each element should be.

Things to consider:

• Option A is simpler to administer. Option B is more precise but more complex to calculate.
• Option A may bring workers who picked up occasional voluntary overtime but are not genuinely regular workers. Option B provides a stronger filter.
  Think about workers in your business who work variable additional hours – would you consider them genuinely regular workers deserving of a guaranteed hours offer, or occasional cover staff?

How the Guaranteed Hours Offer is Calculated

The number of hours in the guaranteed hours offer must reflect the hours the worker actually worked during the reference period. The consultation asks whether this should be calculated using the mean average (every hour counts equally) or a median average (outlier weeks have less influence).

Things to consider:

• The mean average is straightforward but can be significantly affected by unusually busy or quiet weeks.
• The median average is more representative of a worker's typical week and reduces the influence of seasonal peaks.
• Consider what would happen to your guaranteed hours offer calculations if they were based on a period including Christmas, a major sporting event, or your busiest holiday week.

The consultation also asks about the time period over which hours are expressed (weekly or monthly), and whether employers should be able to use a small adjustment margin to align guaranteed hours with their actual shift patterns.

Things to consider:

• Most businesses in hospitality, retail and hotels work on weekly rotas. Weekly expression of hours is likely the most practical default.
• An adjustment margin – for example the ability to round up or down by a small fixed number of hours – could help align the offer with real shift patterns (e.g. shifts that are always 4, 6 or 8 hours long).

Definition of Temporary Need

If a worker is on a limited-term contract that is shorter than the reference period, the employer does not need to make a guaranteed hours offer, provided the contract was for a genuine temporary reason. The Act defines three categories of legitimate temporary need:

1. A specific task with a defined end point.
2. A specific task with a defined finish date.
3. A 'temporary need' to be defined in regulations.

The consultation is specifically asking whether categories 1 and 2 are sufficient to cover seasonal demand, and what else might need to be included in category 3.

Things to consider:

• Seasonal peaks – Christmas, Easter, summer, bank holidays – are not a specific task or event. They are a period of elevated demand that rises and falls. Think carefully about whether your seasonal hiring practices would be protected under categories 1 and 2 alone.
• Cover for maternity, paternity, adoption or long-term sickness leave is another common temporary need that may not fit neatly into the existing categories.
• Consider all the reasons you engage workers on a temporary basis and whether each would be covered.

Exclusions and Exemptions

The consultation asks whether certain categories of worker should be excluded from the right to guaranteed hours entirely, and whether certain circumstances should exempt employers from the duty to make an offer.

Things to consider for worker exclusions:

• Workers who have multiple contracts with the same employer whose combined hours already exceeded the threshold.
• Workers who have genuinely chosen flexible arrangements – for example students, carers or those with health conditions – and have confirmed that preference in writing.
• Workers within a probation period.

Things to consider for employer exemptions:

• Circumstances entirely outside the employer's control – premises damage, loss of licence, severe weather, public health emergencies, transport disruption.
• Think about the full range of circumstances that could make it genuinely impossible for your business to fulfil guaranteed hours obligations temporarily.

Note: The consultation also covers all of the above questions specifically for agency workers, where different rules may apply to reflect the three-way relationship between worker, agency and hirer. If you use agency workers, make sure you respond to the agency-specific questions too.

Part 2A: Reasonable Notice of Shifts

This section deals with the right to receive reasonable advance notice of shifts. The government is proposing a 'presumed reasonable' notice period as a starting point – employers who give less notice than this will need to demonstrate it was reasonable in the circumstances, and workers who feel they received less than reasonable notice will be able to make a claim to an employment tribunal.

The Presumed Reasonable Notice Period

The consultation asks what the presumed reasonable notice period should be for directly engaged workers, with options of 1, 2, 3 or 4 weeks. For agency workers, the options range from less than 5 days upwards.

Things to consider:

• How far in advance do you currently publish your rotas? This will indicate how disruptive different notice period requirements would be for your operation.
• Consider your business's ability to forecast staffing needs accurately. Longer notice periods are only achievable if you have sufficient advance visibility of demand.
• Think about the genuine reasons why shift timings sometimes change at short notice in your business – customer cancellations, weather, sickness. Would a longer presumed reasonable notice period create legal risk for circumstances outside your control?
• The 'presumed reasonable' standard is not a hard rule – it is a starting point. The consultation is also asking what factors should influence whether shorter or longer notice is reasonable in specific circumstances.

Factors Affecting What is Reasonable

The consultation asks in what circumstances longer notice should be required, and in what circumstances shorter notice should be acceptable. This is an important opportunity to describe the operational reality of your business to the government.

Circumstances where you might argue longer notice is reasonable:

• Planned events or bookings where the employer had advance knowledge.
• Shifts where the worker is contractually required to attend and has no right to decline.
• Roles requiring significant preparation or travel arrangements.

Circumstances where you might argue shorter notice is acceptable:

• Last-minute cover for a worker who has called in sick.
• Sudden and significant drop in customer demand beyond the employer's control.
• Adverse weather affecting trading.
• External disruptions such as transport strikes or local incidents.
• Where the worker initiated or agreed to the change.

Part 2B: Payment for Short Notice Cancellations, Movements and Curtailments

This is the section that is likely to have the most immediate financial impact on your business. When an employer cancels, moves or shortens a shift at short notice, they will be required to make a payment to the worker. The consultation is asking about the design of this payment.

Note: No payment is required where the cancellation, movement or curtailment is initiated by the worker themselves, or where workers voluntarily swap shifts between themselves. The obligation only arises when the employer makes the change.

What Counts as 'Short Notice'?

The consultation asks what the short notice threshold should be for directly engaged workers – that is, how close the shift start time a cancellation needs to happen for a payment to be due. Options range from 1 day to 7 days. The government is also considering a two-tier system with a 'very short notice' threshold attracting a higher payment.

Things to consider:

• What proportion of your shift cancellations happen within 24 hours, 48 hours, 7 days? This will help to assess the impact of the different scenarios.
• Think about genuine reasons behind your short-notice changes. Are they mostly within your control, or are they driven by external factors like customer behaviour, weather, or demand?
• A shorter threshold (e.g. 24 hours) means fewer cancellations trigger a payment. A longer threshold (e.g. 5 or 7 days) would capture a much larger proportion of changes and create a significantly higher financial liability.
• Consider the financial forecasting implications. Unlike fixed wage costs, short notice payment liability is unknown at the start of a week. Think about how you would budget for this and whether it's manageable.
• If the government adopts a two-tier system, you will need to track not just whether a shift was cancelled at short notice, but how short. This adds administrative complexity.

How Much Should the Payment Be?

The consultation offers two approaches to calculating the payment:

• A percentage of what the worker would have earned from the cancelled/changed hours at their actual pay.
• A percentage of what the worker would have earned at the National Living Wage rate, regardless of their actual pay.

It then asks what the percentage should be, with options ranging from 10% to 80% of the relevant earnings. A higher percentage means larger payments per cancelled shift.

Things to consider:

• The purpose of the payment is to compensate for genuine inconvenience – non-refundable travel costs, childcare arrangements made, and for the loss of opportunity to take other work. Think about what level of payment reflects this purpose without going beyond it.
• Consider the cumulative impact across your workforce. A payment that seems small per individual can add up significantly across a team of variable-hours workers.
• Think about scenarios where a worker whose shift is cancelled is subsequently offered and accepts an alternative shift in the same pay period. Should a payment still be due if there is no financial loss?
• Consider the interaction with contracted hours – if a worker has already worked their contracted hours for the week, should an additional cancelled shift trigger a payment?

Exceptions to the Payment Obligation

The consultation is seeking views on what circumstances should exempt an employer from the requirement to make a short notice payment. The government's examples include extreme weather and widespread power outages, but the government is inviting views on what else should be included.

Things to consider – circumstances that might justify an exception:

• Genuine unforeseeable demand reduction – a large booking cancelled on the morning, an unexpected quiet period.
• Adverse weather conditions affecting trading – not just extreme weather events, but ordinary bad weather that significantly impacts footfall.
• Transport disruption affecting the employer's ability to trade.
• Loss of licence or regulatory closure.
• Public health restrictions.
• Worker has already met their contracted hours for the pay period.
• An equivalent alternative shift was offered and accepted in the same pay period.

Where an exception applies, the employer must issue an 'exception notice' to the worker explaining the reason. Workers can challenge this at an employment tribunal if they believe the exception does not apply.

Enforcement

The government is proposing that the Fair Work Agency (FWA) – a new enforcement body that began operating in April 2026 – should be able to enforce the right to short notice payments. This would work through a Notice of Underpayment regime similar to that used for the National Living Wage. Where the FWA finds an employer has failed to make a short notice payment, it can require them to pay arrears and a penalty.

Things to consider:

• The government is proposing a penalty of 50% of the arrears owed, with a minimum of £100 per case and a maximum of £5,000 per worker. Consider whether these levels are proportionate for the new complex right.
• The government is proposing that claims can go back 6 years. Think about the long-term liability this creates and whether a shorter period would be more appropriate.
• Consider what guidance and preparation time you would need before enforcement begins, and whether an initial grace period focused on education rather than penalties would be helpful.

Part 3: Agency Workers and the Conduct Regulations

The final section deals specifically with agency workers and asks whether the regulations governing employment agencies should be updated to require agencies to share certain information with hirers to help them comply with the zero hours measures.

Do You Use Agency Workers?

If you do not use agency workers, you can skip part 3 of the consultation entirely. If you do use agency workers, this section is important because it affects how information flows between you and the agencies you work with.

What the Consultation is Asking

Currently, employment agencies are governed by the Conduct of Employment Agencies and Employment Businesses Regulations 2003. The consultation is asking whether these should be updated to require agencies to share specific information with hirers – for example, whether a particular worker is in scope of the zero hours measures, and what their contractual hours are.

Things to consider:

• Without clear information from the agency, you may not know whether an agency worker you are using is in scope of the guaranteed hours measures, or whether you hold any obligations towards them.
• Think about the information you would need from an agency to comply with your duties under the zero hours measures. Is this information you currently receive, or would you need to ask for it?
• Consider the practical implications for your arrangements with agencies and whether your existing contracts address information sharing around compliance.

How to Respond to the Consultation

The consultation is open until 25 August 2026 and can be completed online at the government's consultation portal. You do not need to answer every question – no questions are mandatory and you can skip sections that are not relevant to your business (for example, agency worker questions if you don't use agency staff).

The government have confirmed that responses will be reviewed and taken into account when finalising the regulations. The more businesses that respond – and the more specific and evidence-based those responses are – the better the government's understanding of the real-world implications of the different options.

Tips for Completing the Consultation:

• Set aside at least 3 hours. The consultation is substantial and rushing it will produce less useful responses.
• Use specific examples from your business where the questions ask for qualitative responses. Generic answers are less impactful than concrete real-world scenarios.
• You do not need to answer every question, but the more relevant questions you respond to, the more your perspective will be represented in the final regulations.
• If you operate across multiple sites or have a particularly complex workforce structure, consider whether different parts of your business have different perspectives worth capturing.