Crackdown on zero hours contracts could cost businesses

An analysis carried out by the government has revealed that a crackdown on zero hours contracts could cost businesses £2.9 billion a year.

18 Aug 2026

An analysis carried out by the government has revealed that a crackdown on zero hours contracts could cost businesses £2.9 billion a year.

Employment reforms carried out by Labour will cut the number of hours employees can work before they must be offered guaranteed time.

An analysis published recently showed that the reforms could cost employers between £350 million and £2.9 billion based on the eventual threshold of hours the policy impacts.

Additionally, companies could face more administrative costs and less flexibility.

Around £1.2 billion in costs would come from businesses being forced to pay employees compensation for cancelled shifts.

However, government officials said the reforms could provide a boost of £10 billion to the UK economy because of better productivity and employee wellbeing.

Commenting on the matter, a spokesperson for the Trades Union Congress (TUC) said: 'The aim of this legislation is to stop this practice and give variable hours workers security and stability - so good employers have nothing to fear.'