Changes to zero hours contracts could cost employers up to £2.9bn a year. That is the government's own estimate.

It published the figures yesterday (12 August).

The law behind the changes was passed in December 2025. The zero hours rules do not apply yet, so nothing changes for employers now.

But two things are still undecided. Which workers the rules cover, and how much warning an employer has to give before a shift.

The government is asking businesses and workers what they think until 11.59pm on 25 August. It will decide after that.

What is changing?

Three new rights are coming in. They cover staff on zero hours contracts and staff on contracts with only a few set hours a week.

Set hours. If someone works the same sort of hours week after week, the employer will have to offer them a contract with those hours written in.

Warning of shifts. Employers will have to tell staff about shifts, and about changes to shifts, in advance.

Pay for cancelled shifts. If a shift is called off, cut short or moved at the last minute, the employer will have to pay the worker something.

The rules cover England, Scotland and Wales. They also cover agency staff, so using an agency instead of hiring directly will not get a company out of them.

Zero hours contracts are not being banned. The government says it wants to stop staff carrying all the risk when hours change.

How would set hours work?

The employer counts up the hours a worker has done over a fixed stretch of time. If the worker has been there regularly, they get offered a contract for those hours.

The government has put out an example of how this might work. It is only an example. Nothing has been agreed.

In that example, the right covers anyone on a contract of 16 hours a week or less. They need to have worked in at least 8 of the past 12 weeks.

The example gives staff 2 weeks' warning of a shift.

It also pays half the minimum wage rate when a shift is cancelled 3 days ahead, and 65% of it when a shift is cancelled the day before.

What would it cost?

The government says the cost to employers could be anywhere between £350m and £2.9bn a year. Its middle estimate is £1.1bn.

At that middle estimate, set hours cost employers £270m, giving warning of shifts costs £640m, and paying for cancelled shifts costs £160m.

The number that matters most is the hours cut-off.

Set it at 8 hours a week and about 3.3 million jobs are covered. At 20 hours it is 5.9 million. At 32 hours it is 9.7 million.

Which businesses are hit hardest?

The ones where demand goes up and down and rotas get made up at short notice.

The government names pubs and restaurants, arts and entertainment, office and support services, shops, schools, and health and care.

Are small companies included?

Yes. The rules apply whatever the size of the company. There is no cut-off for small firms.

That puts the pressure on record keeping. To work out who qualifies, a company needs to know how many hours each person did, week by week, going back 12 weeks or more.

Get the warning or the payments wrong and a worker can take the company to an employment tribunal. That is the court that deals with disputes at work.

What are business groups saying?

The Federation of Small Businesses says the plans are wrong and will push unemployment up.

The British Retail Consortium says the cost to employers is out of proportion to what workers get, and that shops face a bill on top of that to update their payroll systems.

The government says nothing has been decided and it wants to get the detail right first.

What can you do now?

The rules are expected to start in 2027. No date has been set.

Work out which of your staff would be covered at each of the hours cut-offs being talked about. Then check whether your systems can actually pull weekly hours going back 12 weeks.

Rotas are the other thing. About 40% of staff currently get less than a week's warning of a shift, which is less than any of the options on the table.

Any business can tell the government what it thinks before 25 August. There is a form on GOV.UK, or you can email the Department for Business, Innovation, Science and Trade.