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zero-hours contract

Contributor(s): Ivy Wigmore

A zero-hours contract is an agreement stating that a given employer is not obligated to provide a worker with any minimum number of hours. Zero-hours contracts are sometimes called casual contracts.  

Such a contract may also stipulate that the worker is not required to accept any employment hours that are offered. However, because the employer is under no obligation to offer work, those who turn down shifts may get fewer opportunities in the future as the employers turn to those who accept the hours they’re offered more reliably.  

For employers, zero-hours contracts mean saving money: The business is not obligated to provide many benefits that it offers full-time employees and it can increase or decrease the size of their workforce quickly to meet demand.  

For the worker, zero-hours contracts can offer greater flexibility and, ideally, life-work balance. At least in theory, they need only accept work that they want and can, at least to some extent, arrange their time as they wish. However, about 30 percent of those on zero-hour contracts report that they aren’t getting enough work to meet their needs. As a result, many have contracts with multiple employers simultaneously.  

Zero-hours contracts are increasingly common in the ongoing trend of what’s being called the gig economy. An Intuit study of the trend predicted that by 2020, 40 percent of the American workforce will be independent contractors.  

This was last updated in July 2018

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