A zero-hours contract is an arrangement under which an employer is not obliged to provide any minimum number of working hours, and the worker is paid only for the hours actually offered and worked. The worker is typically called in when demand requires, sometimes at short notice. The term is most closely associated with the United Kingdom, where it has a legal definition, but similar on-call, casual or "if and when" arrangements exist in many countries.
Zero-hours contracts are a form of non-standard work and a prominent example of labor market flexibility. They are common in hospitality, retail, services such as social care, education support and delivery work. They are often discussed alongside the gig economy, although gig workers are usually self-employed while zero-hours workers are generally classed as workers or employees with basic statutory rights such as the minimum wage and paid holiday.
Zero-hours contracts in plain terms
A zero-hours contract is a bit like being on a substitute teacher's list. You are on the books, and the school can call you whenever someone is off sick, but there is no promise of any days at all. Some weeks the phone rings every morning; some weeks it never rings.
For a student who wants a few shifts around lectures, that can suit well. For someone trying to cover rent and bills, the same uncertainty can make it hard to budget, borrow or plan childcare, because income may change sharply from week to week.
How they work
Under UK law a zero-hours worker still receives the wage floor for each hour worked, holiday pay accrued in proportion to hours, and protection against discrimination. Rights that depend on employee status and length of service, such as unfair-dismissal protection, can be harder to establish. Employers use these contracts to match staff to fluctuating demand, a form of variable cost control,, cover absence and avoid paying for idle time. In principle the worker may turn down shifts; in practice some report fearing that refusals lead to fewer offers.
The Office for National Statistics measures the number of people who say their main job is on a zero-hours contract using the Labour Force Survey. The figure rose sharply in the 2010s and has mostly been around or above one million people since 2020, roughly 3 to 4% of everyone in work. Young people, students, part-time workers and people over 65 are over-represented.
Regulation
Rules differ by country:
- United Kingdom. The Small Business, Enterprise and Employment Act 2015 made exclusivity clauses, which barred zero-hours workers from working for anyone else, unenforceable. The Employment Rights Act 2025, which received Royal Assent in December 2025, adds a duty to offer guaranteed hours reflecting hours regularly worked over a reference period, plus rights to reasonable notice of shifts and compensation for cancelled shifts. Its detailed rules were under consultation in 2026, with implementation expected from 2027.
- Ireland. The Employment (Miscellaneous Provisions) Act 2018 banned zero-hours contracts except in limited cases, such as emergency cover.
- New Zealand. A 2016 amendment to its employment relations law effectively outlawed zero-hours arrangements by requiring agreed hours and compensation for availability.
- United States. There is no national rule, but "fair workweek" or predictive scheduling laws in Oregon, New York City, San Francisco, Chicago and other places require advance notice of schedules and premium pay for last-minute changes in certain industries.
Arguments for and against
Supporters, including many business groups, argue that zero-hours contracts:
- Help firms with seasonal or unpredictable demand, a recurring feature of the business cycle and of tourism, stay in business and hire more people than they could on fixed hours.
- Suit workers who want flexibility, such as students, carers and retirees; surveys find a sizeable share of zero-hours workers do not want more hours.
- Offer a route into work for people who would otherwise struggle to get a first job, lowering unemployment.
Critics, including trade unions and many labor economists, argue that they:
- Shift business risk onto workers, making income volatile and contributing to the insecure class some call the precariat.
- Give employers power over workers who fear losing shifts, which may discourage complaints about pay or conditions.
- Reduce access to credit and housing, since lenders and landlords prefer predictable income, and complicate claims for welfare benefits and transfer payments that depend on earnings.
- Are linked to underemployment, where people work fewer hours than they want, a form of slack that headline unemployment rates miss and that can hold down wage growth even when unemployment is low.
The economic evidence suggests zero-hours workers earn less per hour on average than comparable full-time and other workers on standard contracts, though part of that gap reflects differences in jobs and experience. Debates about these contracts feed into wider discussions of labor markets, independent contracting and informal employment, where workers face similar insecurity with even fewer protections.