What is a Zero-hour Contract?

A zero-hour contract is a type of contract between an employer and a worker, where the employer is not obliged to provide any minimum working hours, while the worker is not obliged to accept any work offered.

They are also known as casual contracts.

Zero-hour contracts are usually for ‘piece work’ or ‘on call’ work, e.g., season work, such as Christmas when businesses enter a busier period, especially in the hospitality industry.

Zero-hour Worker

The following rights apply to zero-hour workers:

Employers should consider whether a zero-hour contract is the best type of contract for their business needs depending on the nature of the work to be offered and the specific circumstances. Alternatives might include:

Pros of a Zero-hour Contract- for the worker

Cons of a Zero-hour Contract- for the worker

Pros of a Zero-hour Contract- for the employer

Cons of a Zero-hour Contract- for the employer

A zero-hour contract worker that is on PAYE with their employer, in most cases they are eligible for the Employee Furlough Scheme (CJRS).

Employees and workers whose pay varies, if the employee has been employed (or engaged by an employment business) for a full 12 months prior to the claim you can claim for the higher of either:

If the worker has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.

If the worker only started in February 2020, the employer could use pro-rata for their earnings so far to claim.

Should the employer choose to ‘top up’ salary in addition to the grant (this is not a requirement) – any Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions on any additional top up will not be funded through this scheme.

Nor will any voluntary automatic enrolment contributions above the mandatory minimum contribution.

In some cases, rather than furloughing zero-hour contract workers, the employer may opt to stop offering shifts to these workers.

Workers on zero-hour contracts are entitled to SSP too. To be eligible, the criteria is that:

 

But due to coronavirus, the legislation states that those who qualify for SSP, including zero-hour workers, and who self-isolate due to coronavirus, will get sick pay from day one.

This means they will not have to wait the usual four days before benefiting.

If an individual is not eligible to receive sick pay, they could get benefits such as Universal Credit or contributory Employment and Support Allowance.

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