A Zero-Hour Employment Contract is a type of agreement that allows employers to hire employees without guaranteeing any specific working hours. Instead, the employee works on an as-needed, as-available basis.
This can be useful for employers who need a flexible workforce and employees looking for a more flexible work schedule. However, it is essential to ensure that the terms of the agreement are fair and that both parties are clear on their responsibilities and expectations.
Sample Zero-Hour Employment Contract
Use our free zero-hour contract template in PDF or Word format to streamline your employment process.
Jobs That May Require Zero-Hour Contracts
- Entertainment venue workers
- Seasonal agricultural workers
- Catering staff
- Amusement park staff
- Lifeguards, rangers, and staff at state and national parks
- Factory workers
- Holiday and seasonal retail workers
- Restaurant workers
When to Use
Employers with varying staffing needs may benefit from hiring workers on a zero-hour contract. With a zero-hour contract, you can hire an employee to work temporarily or on-call without committing to future hours when you may not need the help.
A zero-hour employee can help you cover shifts during emergencies or unexpectedly busy times. At the same time, zero-hour employees have the flexibility to meet their obligations by working only when available.
Advantages and Disadvantages
As an employer, there are both advantages and disadvantages to using a zero-hour contract:
Advantages:
- By reducing labor costs, zero-hour contracts can increase business cost savings.
- Additionally, these contracts offer greater flexibility, allowing employers to respond to changes in demand or unexpected events quickly.
Disadvantages:
- They can negatively impact employee morale and motivation. When workers do not have a guaranteed number of hours, planning their lives and finances can be difficult.
- These contracts do not facilitate building long-term relationships between employers and employees. This can lead to reduced loyalty and commitment on the part of workers.
What to Include
A zero-hour contract is a legally binding document, so it should outline all the details of the work agreement, including:
- Worker’s name, address, and contact information
- Employer name, address, and contact details
- Type of work and worker’s job title
- Start and end date of work agreement, if applicable
- Specific work duties
- Hourly pay rate and benefits
- Payment terms and method
- Timekeeping methods and overtime policy
- Policies for time off due to holidays, emergencies, or illness
- How and why either party may terminate the agreement
How to Write
A zero-hour contract defines expectations for the worker and employer. To ensure that all aspects of the agreement are covered, follow these steps:
Step 1 – Enter Employer and Worker Details
Include the full name of the worker, as well as their address and contact information. Also include the business’s name, business address, and phone number.
Step 2 – Provide the Worker’s Job Title and Full Duties
Although the worker will only work as needed, provide a specific job title or description. The agreement should outline the duties and expectations the worker must meet while working.
Step 3 – Include the Contract Start and End Dates
If your zero-hour contract is for a specific time, clearly indicate the start and end date in the agreement. If the contract is indefinite, you should enter the start date and note the terms for contract termination.
Step 4 – Outline Terms for Contract Termination
Even without an end date, your zero-hour employee contract should include terms under which either party may terminate the contract. For example, the business can terminate the contract if the worker fails to meet the expectations outlined in the agreement.
Step 5 – Detail Hourly Compensation, Benefits, and Other Payment Terms
Enter the agreed compensation amount. It is typically the hourly rate you will pay to the worker for their services. Your contract should also outline policies for overtime, shift work, benefits, paid time off, and holidays.
Step 6 – Advise of Payment Methods and Timekeeping Policies
Include a clause that outlines the payment terms, whether on a daily, weekly, bi-weekly, or other basis. You should also advise how you will pay your zero-contract employees and how you expect them to record hours worked.
Step 7 – Explain Policies for Holiday Pay, Sick Days, and Other Time Off
If you have any specific policies for missed work, emergencies, sick days, or holidays, include that information in your zero-hour agreement.
Step 8 – Sign and Date the Agreement
To ensure the agreement is legally binding, the employer and worker should sign and date it.
Employer Considerations
Zero-hour contracts can be a helpful tool, but you should consider the following before hiring workers on a zero-hour basis.
Laws and Regulations Regarding Employee Rights
The Fair Labor Standards Act (FLSA) and other federal, state, and local laws establish standards for wages, hours, overtime, and other workplace considerations. Before you use a zero-hour contract, be aware of the laws and regulations that apply to your business. If not, you could fall afoul of federal and state labor laws.
Human Resources Requirements and Policies
Your company may have established policies for employees and workers. Human resources (HR) departments often create specific employment contracts and policies to ensure your company meets regulatory requirements. Before entering a zero-hour contract, be sure it does not violate your company policies.
Whether a Zero-Hour Contract is Appropriate
From an employer’s perspective, a zero-hour contract may seem ideal. However, a zero-hour contract is not always appropriate, and misuse of such agreements could violate labor laws.
For example, an employee who works full-time with no end date may be better suited to a permanent employment contract. Similarly, a temporary employment contract may be appropriate if you plan to have your employee work full-time but only for a specific period.
Frequently Asked Questions
Are Zero-Hour Workers Entitled to Holiday and Sick Pay?
Most zero-hour workers work on a contract basis, which makes them ineligible for benefits such as sick pay and paid holidays.
What Rights Do You Have on a Zero-Hour Contract?
As a zero-hour contract worker, you have a right to a minimum hourly wage, choose which work you accept, and terminate your contract at any time. You can also work for multiple companies rather than being tied to one employer full-time.
Can You Dismiss Someone on a Zero-Hour Contract?
Whether you can dismiss someone on a zero-hour contract depends on the terms of the contract. Some require grounds for termination, while others allow for termination at any time.
