What’s A Zero-Hour Employment Contract? (2026)

What Is a Zero-Hour Employment Contract?

A zero-hour employment contract establishes a working relationship. However, unlike many other kinds of employment contracts, it doesn’t guarantee any hours.

Employees on zero-hour contracts only work if (1) the employer offers them a shift or project and (2) they accept that shift or project.

Employers are still obligated to follow the Fair Labor Standards Act (FLSA) and other applicable labor laws. For instance, if an employer is required to have workers’ compensation insurance, coverage generally must extend to zero-hour employees.

When to Use a Zero-Hour Employment Agreement

Employers may find zero-hour contracts useful if they’re looking for an employee to do one or more of the following:

• Work on an as-needed basis
• Cover shifts during busy times
• Fill short-term gaps

Many people who take on zero-hour contracts do so as a second job or a side hustle.

How to Write a Zero-Hour Contract Step by Step

Here’s a quick overview of the steps needed to write a zero-hour contract:

• Enter basic employer and employee information.
• List the job title, description and responsibilities.
• Explain that work is offered as needed.
• Add information on pay rates.
• Detail procedures for dispute resolution.
• Detail procedures for terminating the agreement.

It’s best for employers to work with a qualified employment law attorney when creating these contracts.

Benefits and Drawbacks of Zero-Hour Contracts

Zero-hour contracts have advantages and disadvantages for employers and employees.

Employers

For employers, zero-hour contracts offer a few key benefits:

• They may help lower labor costs.
• They make it easy to adjust staffing needs based on demand.
• They make it possible to quickly react to emergencies or unexpected workforce needs.

However, employee retention may be low if hours aren’t predictable. Because employees aren’t obligated to accept shifts, employers may deal with low availability.

Employees

Zero-hour contracts have several benefits for employees:

• They may choose which shifts to take.
• Employees with other jobs can earn extra income.
• Zero-hour schedules can fit around school and other responsibilities.

However, unpredictable income makes it difficult for employees to plan.

How a Zero-Hour Agreement Can Be Terminated

Zero-hour contracts usually specify how the agreement can be terminated. Both parties must follow contract terms when ending the arrangement.

Want to Learn More?

If you’re an employer or employee hoping to learn more about zero-hour contracts and other types of employment contracts, it can be hard to know where to start. That’s where we can help. At ConsumerShield, we connect people with legal forms and resources.