The UK government has finally put numbers on what ending “one-sided flexibility” will cost employers, and the range is wide enough to worry any HR leader who runs a shift-based workforce. A consultation now open on implementing the Employment Rights Act 2025’s zero-hours reforms carries an impact assessment showing net costs to business of between £300 million and £1.4 billion a year, with a central estimate around £800 million. For payroll, workforce planning, and HR technology teams, that is not an abstract policy number. It is a preview of what scheduling compliance is about to require.
What the reform actually requires
The Department for Business and Trade’s consultation, open until 25 August 2026, covers the detailed implementation of three new rights for zero-hours and low-hours workers under the Employment Rights Act 2025:
- A right to guaranteed hours that reflect what a worker actually works over a reference period, not just their contracted minimum.
- A right to reasonable notice of shifts, including changes to previously confirmed schedules.
- A right to payment when a shift is cancelled, moved, or curtailed at short notice.
From 2027, employers will have a duty to offer qualifying zero-hours and low-hours workers a contract with guaranteed hours based on their usual working pattern. The consultation is where the government is deciding the mechanics: how the reference period is measured, how “short notice” is defined, and, critically, who qualifies in the first place.
What it will cost, right by right
The impact assessments that accompany the consultation break the bill into three pieces. The right to guaranteed hours could cost employers as much as £450 million a year at the high end, with a central estimate closer to £270 million. Reasonable notice of shifts is the most expensive single element: up to £1.2 billion a year at the high end, roughly £640 million in the central case. Payment for cancelled or curtailed shifts adds up to £1.3 billion at the high end and about £160 million centrally. Add the three together at their maximum scope and the gross figure reaches £2.9 billion a year, before netting against savings employers see from more stable scheduling and lower turnover.
That gap between £300 million and £2.9 billion is not noise. It is the government showing its own uncertainty about a single variable that will determine which employers feel this most.
Three separate options assessments, three separate fights
Notably, the Department for Business and Trade did not publish one combined cost estimate. It published three separate options assessments, one for each right, each running to well over 80 pages. That structure matters for HR and legal teams reading the consultation, because it means each right is still open to a different design choice. The guaranteed-hours right hinges on how the “reference period” for measuring a worker’s usual hours is defined; a shorter reference period tends to favor workers in volatile-demand roles, while a longer one smooths out seasonal spikes for the employer. The reasonable-notice right hinges on how many days or hours of notice counts as reasonable, a threshold the consultation does not fix. Employers responding to the consultation can, in principle, push each of those three levers independently rather than treating the reform as a single package.
The threshold is the whole ballgame
The hours-per-week threshold for qualifying is, in the government’s own framing, the biggest driver of cost. Ministers are weighing a cutoff somewhere between 8 and 20 hours a week for entitlement to the new rights. Set it low and more part-time and casual staff qualify, pushing costs toward the £1.4 billion to £2.9 billion range. Set it higher and the reform narrows to the workers most exposed to unpredictable scheduling, closer to the £300 million floor.
That single design choice is why retail, hospitality, logistics, and care employers, the sectors with the heaviest reliance on zero and low-hours contracts, are the ones with the most at stake in a technical-sounding consultation response window.
What it means for the HR leader
Three things are worth doing before the consultation closes and before 2027 arrives:
First, model your own exposure. Pull actual worked hours for zero-hours and low-hours staff over a representative reference period and run it against both an 8-hour and a 20-hour qualifying threshold. The gap between those two scenarios is likely to be the gap in your own compliance budget.
Second, audit your scheduling and workforce management systems now, not in 2027. If shift changes, cancellations, and notice periods are not already tracked in a system that can produce an auditable reference-period record, that is the gap to close first. The right to reasonable notice and the right to cancellation payment both depend on being able to prove what was scheduled, what was changed, and how much notice was given.
Third, if your organization has a stake in retail, hospitality, logistics, or care work, this consultation is worth an actual response before 25 August 2026, not just a bookmark. The government is explicitly asking for input on where the threshold should sit, and that is the one lever still open for negotiation.
The bigger signal
This is the second major UK workforce compliance shift HR teams have had to absorb in as many months, arriving as the broader UK labor market is still finding its footing after a long stretch of soft hiring. The zero-hours reforms are not happening in isolation. They are landing on employers at the same moment permanent hiring is only just stabilizing, which means the cost of getting scheduling compliance wrong now carries more weight than it would have a year ago. For HR and workforce technology leaders, the message from this impact assessment is straightforward: the price of ending one-sided flexibility is real, it is largely still negotiable, and the window to shape it closes in less than two weeks.
