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.

What Kinds of Jobs Typically Use Zero-Hour Contracts?

Technically, any type of employer may use a zero-hour contract. However, there are some industries and roles where they are much more common.

Retail

Many retail employees work full- or part-time. Because retailers often need additional staff during busy periods, though, some may ask seasonal employees to sign a temporary employment contract. Others may have zero-hour contracts with “on-call” staff members whom they ask to come in as needed.

Healthcare

Hospitals may have zero-hour contracts with additional staff members to help fill gaps in patient care.

Education

Some school districts have zero-hour contracts with substitute teachers. Similarly, colleges and universities often have a pool of zero-hour staff members who can supervise exams or teach classes when professors or lecturers are absent.

Delivery/Logistics

Delivery companies may offer zero-hour contracts so they can easily adjust staffing as needed.

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

You might wonder whether you should look for zero-hour employees or hire independent contractors. Generally, the answer depends on the work you need done.

If you decide how, when and where work needs to be done, a zero-hour agreement is best. If you just need a specific end result, an independent contractor may be better. For example, if you own a retail store and sometimes need extra workers, you would likely need to create a zero-hour contract. That’s because you need people to be on-site at specific times.

On the other hand, if you need someone to update your website, you could sign an independent contractor agreement form with someone who can complete the work on their own time.

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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 any applicable 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.