Zero hours contracts
Zero hours contracts have had a lot of bad press. As they offer no guarantee of work, they have been a key cause of many lacking job security. Whilst this is undoubtedly accurate in many cases, zero hours also offer flexibility for those who require it. Although this article isn’t addressing the morality of zero hours contract, we will briefly look at what one is.
What does a zero hours contract entail?
Zero hours contracts offer no guarantee of work and equally the ‘worker’ has no obligation to accept any work offered. In reality, refusal to accept work may lead to no further work being offered so the power clearly lies with the employer. Since 2015, exclusivity is no longer allowed so workers are allowed to take up multiple roles.
Entitlement to holidays
Holiday entitlement calculations for zero hours contracts are fairly tricky. In order to get to a pro-rated equivalent of the 5.6 weeks statutory leave, you have to use this calculation. Holiday entitlement is paid at the rate of 12.07 per cent of your hourly rate for each hour worked. So you need to keep good records.
In terms of paying the accrued holiday pay, it technically should be taken when the worker is on holiday. However, in reality as long as it is recorded as a separate line on the payslip, the timing of the payment isn’t critical.
Sick pay entitlement
Sick pay entitlement is another complex calculation. Statutory Sick Pay (SSP) is available to zero hours contract workers as long as:
- They’ve done some work for you.
- They’re ill for four days or more in a row (including days off).
- They follow your rules about reporting sickness—or tell you within seven days.
- They earned on average at least £118 per week (before tax) in the past 8 weeks.
The minimum weekly income has to come from one employer. If a worker relies on multiple jobs to reach this wage, they might not be eligible for SSP.
How much Statutory Sick Pay do zero hours contract workers get?
Zero hours workers can get £94.25 a week SSP for up to 28 weeks.
Staff only get SSP for the days they’re scheduled to work and don’t get it for the first three days they’re off.
You’ll pay your staff in the same way you do their normal wages. For example, if you pay them weekly, you’ll pay their SSP weekly.
When would a zero hours contract worker not get sick pay?
You don’t have to pay zero hours workers SSP if:
- They’ve received the maximum amount of SSP (over 28 weeks).
- They’re getting Statutory Maternity Pay.
- They’re self-employed.
Your staff might be self-employed if they get paid for every “gig” they do, have a right to substitute, a right to choose how to do work, and no obligation to perform work. For example, delivering food or driving people.
But that’s not always the case. In 2016, Uber drivers won an employment case after arguing they’re workers rather than self-employed.
If you need help recording sickness, we recommend HR Software that will help you keep track.
Zero hours workers are covered by the National Minimum Wage regulations in the same way as employees. So if you are a care worker on a bank contract and you need to commute between homes as part of your role, you should be paid for that travel time. Similarly workers who are on call and stay on employer’s premises are entitled to receive at least the Minimum Wage on average.
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