Zero-hours and casual work in the United Kingdom
Reviewed by Mellow Editorial Team, HR & payroll content team
Zero-hours contracts are legal in the UK and widely used in hospitality, retail, care and creative industries. They can suit both workers who want flexibility and employers with genuinely unpredictable workload — but they carry real legal obligations that many employers underestimate.
What a zero-hours contract actually is
A zero-hours contract is an agreement where the employer makes no guarantee of minimum hours. The worker is not obliged to accept work when offered, and the employer is not obliged to offer it. "Casual" arrangements sometimes operate on a similar basis, with work offered as an occasional, one-off assignment rather than an ongoing contract.
The label you put on the arrangement matters less than the reality. If someone works regular, consistent hours week after week, a tribunal may find there is an implied contract of employment regardless of what the paperwork says. Courts and tribunals look at the actual working pattern, not the written agreement.
Employment status — the critical question
Zero-hours workers typically fall into one of three categories: employee, worker, or self-employed. Most zero-hours arrangements create worker status, which sits between full employment and self-employment.
Workers are entitled to:
- National Minimum Wage or National Living Wage for every hour worked
- Statutory annual leave — 5.6 weeks (28 days including bank holidays for a five-day week), calculated on a pro-rata basis
- Protection from unlawful deduction of wages
- Rest breaks and limits under the Working Time Regulations
- Auto-enrolment into a workplace pension if they meet the earnings and age thresholds (employer minimum 3%, employee 5% of qualifying earnings)
They are not automatically entitled to statutory sick pay or family-leave pay unless their employment status rises to that of an employee. That status question depends on facts such as mutuality of obligation and personal service — and under the Employment Rights Act 2025, day-one employment rights have been strengthened, so it is worth reassessing historic casual arrangements if you have not done so recently.
Pay, holiday and payroll obligations
Every hour a zero-hours worker works must be paid at least at the applicable National Minimum or Living Wage rate for their age group. You cannot average pay across weeks or months in a way that brings any single hour below the minimum.
Holiday pay for irregular-hours workers is calculated using the statutory 52-week reference period. You average their pay over the 52 weeks prior to the leave (ignoring any weeks where no pay was received, up to a 104-week lookback). Rolled-up holiday pay — where an uplift is added to each hourly rate instead of paying when leave is taken — is now permitted for irregular-hours and part-year workers following changes that took effect from April 2024.
On the payroll side, zero-hours workers are usually employed (PAYE) rather than genuinely self-employed. You must run them through payroll, deduct income tax using their tax code, and apply National Insurance contributions — employee NICs at 8% up to the upper earnings limit (then 2% above it), and employer NICs at 13.8%. Each time they are paid, an Full Payment Submission must reach HMRC via Real Time Information on or before payday. For an ad-hoc workforce paid at irregular intervals, staying on top of RTI deadlines takes discipline.
Exclusivity clauses and the right to work elsewhere
Exclusivity clauses in zero-hours contracts — terms that prevent workers from working for other employers — are unenforceable. Workers on zero-hours arrangements have the right to work elsewhere. Any attempt to enforce an exclusivity clause, or to penalise a worker for taking other work, is unlawful.
Since 2023, this protection has extended beyond pure zero-hours contracts to workers guaranteed less than a specified weekly number of hours. Keep this in mind if you offer low guaranteed-hours contracts as an alternative to zero-hours arrangements.
Practical steps for employers
A few straightforward practices reduce your legal exposure significantly:
Document genuinely. Issue a written contract that accurately reflects the arrangement. Under current law, workers are entitled to a written statement of employment particulars from day one. State clearly that no minimum hours are guaranteed, but do not include an exclusivity clause.
Track hours carefully. With an irregular workforce, time records are your evidence that minimum wage obligations have been met. Gaps in records create risk.
Review the pattern regularly. If someone has worked consistent hours for several months, take advice on whether their status has shifted. The Employment Rights Act 2025 includes a right for workers to request a more stable contract after 26 weeks of service, and you must respond in a reasonable timeframe.
Get holiday pay right. Use the 52-week averaging method or, if you use rolled-up pay, apply the correct statutory rate and show it as a separate line on payslips.
Pension auto-enrolment applies. Check whether each worker crosses the earnings threshold in any given pay period, not just annually. Casual workers can trigger auto-enrolment obligations in a single high-earnings week.
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