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Thu, 13 Aug 2026

Thu, 13 Aug 2026 Zero hours crackdown could cost firms up to £2.9bn a year

Labour's employment rights bill crackdown on zero hours contracts could cost businesses up to £2.9bn a year, new official analysis has found.

* Government analysis suggests that hospitality and retail companies will be most affected by a crackdown on zero hours contracts.
* Businesses could face costs of up to £2.9bn per year due to the policy, which would cut the number of hours staff can work before being offered guaranteed time.
* The cost to employers depends on how many hours the policy applies to: if it's 48 hours or more, companies will pay more; if it's between 8-20 hours, the cost will be lower.
* The estimated costs are: + £350m - £2.9bn (depending on the threshold of hours) + £1.2bn from businesses paying workers compensation for cancelled shifts + £1.1bn as a middle estimate
* However, the government also claims that the policy could provide a £10bn boost to the economy due to better wellbeing and productivity.
* The net average cost of the reforms would be between £300m and £1.4bn, taking into account the potential benefits.
* Hospitality and retail companies will be most affected by the change, with some employers estimating that it would be a "further hammer blow" for struggling businesses.
* Business groups have questioned whether the costs are disproportionate to the benefits for workers.