Zero hours contract reforms risk raising costs and cutting youth jobs, CIPD warns
New CIPD research finds two-thirds of employers expect higher costs under planned zero hours reforms, as the UK Government's consultation closes today.
New CIPD research finds two-thirds of employers expect higher costs under planned zero hours reforms, as the UK Government's consultation closes today.
The CIPD has warned that complex new rights for people on zero and short hours contracts risk raising employment costs and will push employers towards greater use of temporary and self-employed staff. The warning comes in our response to the UK Government's consultation on the reforms, which closes today.
We're calling for tripartite talks between government, employer bodies and trade unions to agree changes that make the rules workable in practice. Without this, the reforms will undermine workforce flexibility and employment opportunities, particularly for students and other workers unable to commit to regular hours due to their personal circumstances.
Our survey of employers who use zero hours contracts found:
Nearly half a million (479,000) young people aged 16 to 24 are currently on zero hours contracts. That includes 250,000 students who use them to balance study and work.
CIPD research show that most people on zero hours contracts are classed by their employer as ‘employees’, not ‘workers’, and their job satisfaction is comparable to people working regular hours in similar roles. Nine in ten (89%) say their contract suits them well. Only 18% want more hours in their current job, and just 7% want a different job with longer hours.
The government's aim is to end what it calls "one-sided flexibility" and give people on zero hours and short hours the right to move to more predictable hours. That's a fair goal, but our evidence shows the current proposals will fail to achieve this and will disadvantage employers, while undermining the provision of flexible jobs for those that need them.
"Without significant compromise on some of the key measures in this consultation, there is a real risk that these regulations will disadvantage both businesses and workers and undermine efforts to boost employment and growth."
Our response is based on focus groups and interviews with HR practitioners, a large-scale employer survey, and analysis of UK and international labour market data. We're asking government to:
These changes aren't in force yet. They're part of the Employment Rights Act 2025, and the government expects them to take effect in 2027, though no exact date has been confirmed.
That gives employers time to prepare, but not a reason to wait. HR teams should look now at where they use zero hours or low hours contracts, and work through what a guaranteed hours offer would mean for rotas, costs and workforce plans. We'll keep pressing government for a workable outcome, and we'll update our guidance as the detail becomes clearer.
Our submission to the Department for Business and Trade
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