The UK's zero hours reform costs hotels more in shift notice than in guaranteed hours. That is the government's own figure.

The UK government put a price on its zero hours reforms on 12 August 2026, in an analytical covering note published alongside the consultation. The direct cost to employers comes out between £350 million and £2.9 billion a year, with an indicative central figure of £1.1 billion. Trade coverage carried the £2.9 billion. The more useful number sits in a table further in, where the government breaks that total into three component rights and shows that the smallest of the three, in every scenario it modelled, is the one the sector has spent two years worrying about.

This piece is for independent hoteliers in England, Scotland and Wales who use zero hours or low hours contracts for housekeeping, front desk cover or seasonal peaks, and for operators outside the UK reading it as a template. The reforms are law in principle and unwritten in detail, and the detail is what sets the bill.

The Act passed in December 2025 and the measures that matter are still not in force

The Employment Rights Act 2025 received Royal Assent on 18 December 2025, the point at which a bill becomes an act of Parliament in the UK. The zero hours measures inside it have not taken effect, because each needs secondary legislation, called regulations, to specify how it works. The regime is scheduled to commence in 2027.

Three rights are involved: guaranteed hours, under which an employer must offer a qualifying worker a contract reflecting the hours actually worked over a set window called a reference period, reasonable notice of shifts, and payment when a shift is cancelled, moved or cut short at short notice. The consultation on how each of those should be defined opened on 2 June 2026 and closed on 25 August 2026. That window has passed and the government is writing the regulations.

Reasonable notice of shifts is the largest line in the costing, and guaranteed hours is the smallest

The covering note prices each right separately at a low, central and high estimate.

The right to guaranteed hours runs £100 million at the low end, £270 million central and £450 million high. The right to reasonable notice of shifts runs £240 million, £640 million and £1.2 billion. The right to payment for shifts cancelled, moved or curtailed at short notice runs £20 million, £160 million and £1.3 billion. Guaranteed hours is the cheapest of the three at every point on the range, and at the high end reasonable notice alone costs £1.2 billion against £450 million for guaranteed hours, a ratio of roughly 2.7 to 1.

That is a different story from the one the sector has been telling. The fear has been about converting flexible headcount into fixed contracts. The government's arithmetic says the expensive change is the scheduling discipline around every shift, whether or not anyone gets a new contract out of it.

The note warns against adding the three lines together, because each assessment prices its right in isolation while the measures overlap on the same employers and systems, which is why the £1.1 billion total is lower than the sum of the central figures.

The hours threshold is the single biggest driver, and it has not been set

The hours threshold, meaning the weekly hours below which a worker qualifies, is described in the note as the biggest driver of the impacts, and the government publishes its sensitivity.

On the right to payment for cancelled shifts, holding everything else constant, the cost falls from £1.3 billion a year at a 48 hour threshold to £450 million at 32 hours and £340 million at 24 hours. On guaranteed hours, it falls from £450 million at a 20 hour threshold to £340 million at 8 hours. The share of employee jobs caught rises from 11%, or 3.3 million jobs, at an 8 hour threshold, to 20% at 20 hours, 34% at 32 hours and 91% at 40 hours.

The notice period carries similar weight: the presumption of reasonable notice costs £1.2 billion a year at four weeks, £960 million at two weeks and £620 million at one week. The central scenario the government modelled to produce its £1.1 billion figure assumes a 16 hour threshold for guaranteed hours, a 12 week initial reference period and a two week presumption of notice, and the note is explicit that this is illustrative rather than a policy preference.

Hospitality is named in the document as one of the sectors where the effect concentrates

The government does not leave the sector exposure to inference. The note states that impacts are expected to concentrate where demand is more variable and employers rely on flexible staffing models, and it lists hospitality first, ahead of retail, education and health and social care.

The scheduling data underneath explains why. Around 40% of workers currently receive less than one week's notice of shifts, rising to 63% at two weeks. Around 65% of zero hours workers work in all twelve weeks of a twelve week reference period. A hotel rostering week by week against a booking window shorter than a fortnight sits squarely in the group the reforms are designed to reach.

The government's own case is that this is mildly good for growth, and the sector's numbers come from the sector

The counter-argument deserves space, because its evidence is in the same document.

The government's economic assessment concludes that the Act taken as a whole could have a small positive effect on growth, and the note cites independent research from the University of Cambridge finding that where other countries have introduced laws increasing the predictability of work, the effect on employment has generally been positive. It reports that 59% of workers whose shifts were changed or cancelled at short notice typically received no compensation, and that around four in ten people not currently in work say a right to guaranteed hours would make returning easier.

Set against that, UKHospitality's chair Kate Nicholls called the cost eyewatering and said it arrives on the heels of more than £5 billion in additional employment costs over two years, with more than 100,000 hospitality jobs already lost. Those figures are UKHospitality's own, produced by a body arguing against the measures, and no independent verification accompanies them.

What neither side's numbers settle is the question the government flags itself: whether employers respond by changing which contracts they use, or how they offer additional hours, rather than absorbing the cost. The note says it will keep building evidence on that, which is an admission that the central estimate assumes a behaviour nobody has observed.

Operators are splitting on whether to rebuild the rota now or wait for the regulations

Some properties have started logging actual hours worked per person per week against a rolling twelve week window, on the reasoning that the reference period is the one parameter the government has stated a preference for, and the data takes three months to accumulate whatever threshold is chosen. Others are holding, on the reasoning that a 16 hour threshold and a 40 hour threshold produce different exposures and rebuilding around the wrong one costs more than waiting.

This sits on a cost stack the sector has argued about all year. Hotels were left out of the business rates cut that pubs received in July, the campaign to cut hospitality VAT to 10% passed 300,000 signatures without moving the Treasury, and the tipping law in force since October 2024 still has properties without the written policy it requires.

The figure that decides how much of this a hotel absorbs has not been written down anywhere yet. The consultation asked for views on a threshold anywhere between 8 and 48 hours a week, and the government's own table shows that choice moving the bill for one right alone by nearly a billion pounds a year.