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New premium rate for zero hours contracts?
25 Apr 2017

The new Government employment 'tsar' has suggested that businesses who employ people on zero-hours contracts could be forced to pay a premium rate for short-notice work.

FBCMB | Tracy Worthington - Employment LawMatthew Taylor was appointed to review employment practices following a spate of high profile court cases involving zero hours contracts and the so-called 'gig economy'.

In an interview with the Financial Times, Mr Thomas said the new premium rate could be introduced to stop “lazy” employers exploiting staff.

He was considering a plan to stop employers making workers bear the burden of the risk that they may not be needed.

Tracy Worthington, a partner with the employment law team at FBC Manby Bowdler, said the spectre of a Government imposed premium rate would concern employers.

"It is really important that employers start to look ahead and plan how they may be able to maintain their flexibility. There will be a need to balance any proposed extra cost associated with a premium rate with being able to increase the headcount to cope with additional workload demand.

"The experienced team here at FBCMB will be able to talk employers through their options in relation to employment contracts."   

Mr Thomas' proposal would see firms told to pay an increased rate above the minimum wage if they called upon workers whose contract requires them to be on standby for work.

This would give firms an incentive to guarantee more hours in advance, because it would cost them more to pay people for work that had not already been agreed.

For further advice, please contact Tracy Worthington on 01743 266268 or Alternatively, find out more about our Employment & HR Services

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