Managing zero-hour contract workers: a UK employer's guide (2026)

Zero-hour contracts are legal in the UK — but tightly regulated since 2015, and even more so from 2026. Here's what UK employers need to know to stay onside.

What you can't do

• Exclusivity clauses are banned. A zero-hour worker can also work for competitors. Any contract clause saying otherwise is void.
• You can't treat zero-hour workers worse than comparable permanent staff — same rates, same working conditions.
• You can't deny statutory rights — holiday pay (12.07%), National Minimum Wage, protection from unlawful discrimination all still apply.

Holiday pay for zero-hour workers

Every hour worked earns 4.35 minutes of holiday (12.07%). Two ways to pay it:

• Accrued and paid when taken — the traditional method. Bank the hours, pay them out at their average rate over the previous 52 weeks.
• Rolled-up — 12.07% uplift added to every hour worked. Legal again from April 2024 for irregular-hours workers, but must be itemised separately on the payslip.

New rights from April 2026

• Workers who've been on a zero-hour contract for 12+ weeks can request a contract reflecting their actual regular hours.
• Employers must give reasonable notice of shifts (specified in Code of Practice) or pay compensation for cancellations.
• Payslip must show hours worked + holiday-pay element separately.

Common mistakes

• Failing to track continuous employment — after 12 weeks, AWR rights kick in.
• Not documenting shift offers and refusals — key evidence in an unfair-dismissal claim.
• Rolling up holiday pay without payslip itemisation (potentially £1,000s in backdated claims).
• Assuming zero-hour = no employer NI. Wrong — same 15% applies.