How to Use This Checklist
Click each checkbox to mark items as complete. Your progress is automatically saved to your browser. Use this checklist to:
✅ Three Ways to Use This Tool
1. Draft new zero hours contracts: Ensure you don't miss any essential UK employment law requirements
2. Review existing contracts: Audit your current zero hours agreements against all 27 compliance points
3. Prepare for new workers: Verify your template contract is legally compliant before offering work
⚠️ What Makes a Valid Zero Hours Contract?
📋 Legal Status: Zero hours contracts are legal in UK but heavily regulated. Must be in writing, provided within 2 months. No exclusivity clauses allowed since 2015.
⚖️ Statutory Minimums: Workers entitled to: National Minimum Wage, holiday pay (12.07% accrual method), rest breaks, Working Time Regulations protection, protection from discrimination.
🎯 Essential Terms: Clear statement hours not guaranteed, hourly rate, holiday accrual method, tax/NI status, right to refuse work, insurance coverage.
💼 Common Issues: Exclusivity clauses, below minimum wage, incorrect holiday pay, missing insurance, inadequate H&S procedures, GDPR non-compliance, IR35 misclassification
⚠️ Understanding Importance Levels
🔴 Critical: Must have - statutory requirement or creates serious legal/tribunal risk if omitted
🟡 Important: Should have - best practice and strong legal protection
🔵 Recommended: Nice to have - enhances clarity and prevents disputes
1. Legal Foundation (5 items)
Contract in Writing and Provided to Worker
Zero hours contract must be written and given to worker. Required by Employment Rights Act 1996 s.1. Verbal agreements are legally weak and create evidence problems in disputes. Written contract protects both parties and proves terms were agreed. Must be provided within 2 months of start date.
🔴 Critical
Provided Within 2 Months of Start Date
Written statement of employment particulars must be provided within 2 months (changed from 2 months in 2020 reforms). Failure to provide can result in tribunal claims and compensation up to 4 weeks' pay. Timer starts from first day of work, not offer acceptance. Keep proof of delivery.
🔴 Critical
No Exclusivity Clause Present
Exclusivity clauses banned in zero hours contracts since Small Business, Enterprise and Employment Act 2015. Cannot prevent workers from working elsewhere. Attempting to enforce exclusivity is unlawful and can result in compensation claims. Workers have statutory right to work for multiple employers simultaneously. Remove any "cannot work elsewhere" wording.
🔴 Critical
Clear Statement Hours Not Guaranteed
Contract must explicitly state hours are not guaranteed and employer has no obligation to offer work. This defines it as zero hours contract. Ambiguous wording can create implied terms or "mutuality of obligation" leading to employee status. State: "The Company is under no obligation to offer work and the Worker is under no obligation to accept work offered." Critical for avoiding employment status claims.
🔴 Critical
Worker Classification Correctly Identified
Correctly classify as "Worker" not "Employee" or "Self-Employed". Workers have middle status: entitled to minimum wage, holiday pay, protection from discrimination, but not full employee rights (unfair dismissal, redundancy). Using wrong classification creates tax/NI liability, tribunal risk. Consider IR35 if paid through limited company. Employment status depends on reality of relationship, not label used.
🔴 Critical
2. Pay & Working Time (6 items)
National Minimum Wage/Living Wage Applied Correctly
Must pay at least National Minimum Wage/Living Wage for all hours worked. As of 2025: £11.44/hour (21+), £8.60 (18-20), £6.40 (under 18), £6.40 (apprentice first year). Includes time spent traveling between assignments if employer directs. Excludes travel to/from home. HMRC penalties for non-compliance: 200% of arrears. Named on government "name and shame" list. Calculate including all working time.
🔴 Critical
Holiday Pay Accrual Calculated Correctly
Zero hours workers accrue holiday at 12.07% of hours worked (equivalent to 5.6 weeks statutory minimum). Calculate as: Hours Worked × 12.07% = Holiday Hours Accrued. Pay out with wages or allow time off. Must pay at average hourly rate over 52-week reference period (or shorter if employed less). Cannot "roll up" holiday pay in hourly rate. Keep records of accrual and usage. Harpur Trust v Brazel case: part-year workers entitled to full 5.6 weeks, not pro-rated.
🔴 Critical
Accurate Timesheets Maintained
Maintain accurate records of all hours worked by each worker. Required for: minimum wage compliance, holiday accrual, tax/NI calculations, Working Time Regulations. Employer's responsibility to keep records, not worker's. Use time tracking system: manual timesheets, digital clock-in, or app-based. Must be retained for 3 years. HMRC can request during inspection. Lack of records creates presumption worker's account is correct in disputes.
🔴 Critical
Payslips Provided Showing Hours Worked
Provide itemized payslip for every payment. Required by Employment Rights Act 1996 s.8. Must show: gross pay, deductions (tax, NI), net pay, hours worked (if pay varies), employer name. Zero hours workers particularly need to see hours worked to verify correct payment. Failure to provide payslips: compensation up to £500 per missing payslip. Can be electronic if worker agrees. Must be provided on or before payday.
🔴 Critical
Rest Breaks Provided (20 Minutes for 6+ Hour Shifts)
Workers entitled to 20-minute uninterrupted rest break if shift is more than 6 hours. Working Time Regulations 1998. Break can be unpaid. Must be away from workstation. Also entitled to: 11 hours rest between shifts, 24 hours rest per week (or 48 hours per fortnight). Zero hours workers have same rights as full-time employees. Failure to provide rest breaks: compensation claims and HSE enforcement. Document rest break policy.
🔴 Critical
48-Hour Working Week Limit Observed
Working Time Regulations limit average working hours to 48 per week (calculated over 17-week reference period). Zero hours workers covered unless they sign opt-out agreement. Opt-out must be: voluntary, in writing, can be cancelled with 3 months' notice. Employer cannot force opt-out or discriminate against non-opt-out workers. Track hours across all jobs if worker discloses multiple employment. HSE can prosecute for breaches. Important for worker using multiple zero hours contracts.
🟡 Important
3. Tax & National Insurance (5 items)
PAYE System Operational and Compliant
Zero hours workers are employees for tax purposes - must operate PAYE. Register as employer with HMRC if not already. Use correct tax codes. Deduct tax and NI before paying worker. Even if worker earns below tax threshold, must report to HMRC. Failure to operate PAYE: employer liable for unpaid tax plus penalties and interest. Cannot treat zero hours workers as self-employed without genuine self-employment relationship.
🔴 Critical
Tax and National Insurance Deducted Correctly
Calculate and deduct correct amounts: Income Tax (20% basic rate on earnings above personal allowance £12,570), National Insurance (Employee: 12% on £12,570-£50,270; Employer: 13.8% above £9,100 secondary threshold). Use correct tax code (usually 1257L for 2025/26). Apply cumulative tax basis. Zero hours workers often have multiple jobs - may need BR tax code for second job. Underpayment creates liability for employer plus interest and penalties.
🔴 Critical
RTI Submissions to HMRC Up to Date
Submit Full Payment Submission (FPS) to HMRC on or before each payday via Real Time Information. Must include all zero hours workers paid that period, even if below tax threshold. Report: gross pay, tax deducted, NI deducted, hours worked. Late submissions: automatic penalties £100-£400 per month depending on company size. Use payroll software or accountant. Essential for HMRC's live record of tax payments and for workers' tax credits/benefits.
🔴 Critical
P60s Issued Annually to All Workers
Provide P60 (End of Year Certificate) to every worker employed on 5th April (end of tax year). Must issue by 31st May. Shows total pay and deductions for tax year. Workers need P60 for: tax returns, benefit claims, mortgage applications, loan applications. Zero hours workers entitled to P60 even if only worked few hours. Failure to provide: penalties up to £300 per missing P60 plus daily penalties. Can be electronic.
🔴 Critical
P45s Provided When Employment Ends
Issue P45 when worker leaves (stops accepting shifts/formally resigns). Must provide within 14 days of last payment. Shows pay and tax for current tax year. Worker needs P45 for new employer or to claim jobseeker's allowance. P45 has 4 parts: Parts 1A sent to HMRC, Parts 2 and 3 given to worker. Zero hours worker may request P45 if hasn't worked for extended period. Failure to provide creates administrative burden for worker and next employer.
🟡 Important
⚡
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4. Insurance Requirements (4 items)
Employer's Liability Insurance in Place
Mandatory Employer's Liability Insurance minimum £5 million cover. Required by Employers' Liability (Compulsory Insurance) Act 1969. Covers compensation claims if worker injured or becomes ill due to work. Zero hours workers count as employees for insurance purposes. Operating without insurance: criminal offence, fine up to £2,500 per day. Check policy specifically covers zero hours/casual workers. Must maintain continuous cover. Obtain from authorized insurer.
🔴 Critical
Certificate Displayed Where Workers Can See It
Display current Employer's Liability Insurance certificate at each workplace. Legal requirement under 1998 Regulations. Must be displayed where workers can easily read it: staff room, office notice board, or provided electronically if workers work remotely. Certificate must show: insurer name, policy number, date of cover. HSE can inspect and fine £1,000 for failure to display. For zero hours workers at multiple sites, provide copies or electronic access.
🔴 Critical
Zero Hours Workers Specifically Covered
Verify insurance policy explicitly covers zero hours/casual workers. Some policies exclude or require disclosure of casual staff. Inform insurer of zero hours arrangements when obtaining quote. Failure to disclose can void policy, leaving employer personally liable for compensation claims. Request written confirmation from insurer that zero hours workers covered. Update insurer if number of zero hours workers changes significantly. Check policy wording carefully.
🔴 Critical
Public Liability Insurance Obtained
Public Liability Insurance covers claims from public for injury/damage. Not legally required but essential if: workers interact with public, work at customer premises, or use customer equipment. Typical cover: £1-5 million. Protects against claims from: customers injured by worker actions, property damage caused by worker, professional negligence claims. Many clients/venues require proof of public liability before allowing access. Zero hours workers create same liability exposure as permanent staff.
🟡 Important
5. Health & Safety (5 items)
Risk Assessment Completed Before Worker Starts
Conduct risk assessment for zero hours workers before first shift. Required by Management of Health and Safety at Work Regulations 1999. Identify hazards worker will face, assess risks, implement control measures. Zero hours workers often lack experience/training of permanent staff - higher risk. Assess: workplace hazards, equipment use, manual handling, lone working, violence risk. Document findings. Review if work changes. HSE can prosecute for inadequate risk assessment. Employer duty of care applies equally to zero hours workers.
🔴 Critical
Health and Safety Induction Provided on First Day
Provide health and safety induction to every zero hours worker on first day. Cover: site layout, emergency exits, fire procedures, first aid location, accident reporting, hazards specific to role, safe working procedures, who to contact for help. Keep induction records signed by worker. Cannot assume zero hours worker knows procedures even if experienced. Particularly important if worker called in at short notice. Failure to provide adequate training can result in prosecution if worker injured. HSE prosecutes employers who fail to train temporary workers.
🔴 Critical
PPE Supplied Where Needed and Training Provided
Provide Personal Protective Equipment (PPE) free of charge where risk assessment identifies need. Required by PPE at Work Regulations 1992. Train workers on: when to use PPE, how to use correctly, how to maintain/store. PPE must fit properly - assess each worker individually. Zero hours workers entitled to same PPE as permanent staff. Common PPE: safety shoes, hi-vis, gloves, goggles, hard hat, ear protection. Employer must replace damaged PPE. Cannot deduct cost from wages. Document PPE provision and training. Failure to provide PPE: HSE prosecution and unlimited fines.
🔴 Critical
Fire Safety Procedures Communicated and Documented
Inform zero hours workers of fire safety procedures on first day. Regulatory Reform (Fire Safety) Order 2005 requires: fire evacuation procedures, assembly point location, fire alarm sound, location of fire extinguishers, prohibition on using lifts. Particularly important for zero hours workers who may not be familiar with building. Conduct fire drills including zero hours staff where practical. Display fire action notices. Keep record of fire safety briefing. Employer is "responsible person" for fire safety and can be prosecuted if inadequate procedures.
🟡 Important
Accident Reporting Procedures in Place and Understood
Establish and communicate accident reporting procedures. RIDDOR (Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013) requires reporting of: deaths, specified injuries, over-7-day injuries, occupational diseases. Zero hours workers must know: how to report accidents, where accident book is, who to notify immediately. Keep accident book (BI 510) accessible. Report RIDDOR incidents to HSE within required timeframes. Failure to report can result in prosecution. Important for insurance claims and identifying safety improvements. Zero hours workers equally covered by RIDDOR.
🟡 Important
⚡
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6. GDPR Compliance (3 items)
Privacy Notice Provided Before Collecting Data
Provide privacy notice before collecting personal data from zero hours workers. Required by UK GDPR Article 13. Privacy notice must explain: what data collected (name, address, NI number, bank details, right to work documents), why collected (employment, payroll, tax, legal compliance), who data shared with (HMRC, pension provider, insurers), how long kept (6 years post-employment for tax records), worker rights (access, correction, deletion). Give at application stage, not after. Can be standalone document or incorporated in contract. ICO fines up to £17.5m or 4% turnover for breaches.
🔴 Critical
Worker Data Stored Securely with Access Controls
Store zero hours worker personal data securely. UK GDPR requires appropriate technical and organizational measures. Implement: password-protected systems, encryption for sensitive data, restricted access (need-to-know basis), secure filing cabinets for paper records, regular backups, anti-virus/firewall protection. Train staff on data protection. Zero hours workers' data is same sensitivity as permanent employees. Particular risk with zero hours: high turnover means more data subjects, casual approach to record-keeping. Data breach can result in ICO fines and compensation claims. Document security measures.
🔴 Critical
Data Retention Schedule Documented and Followed
Document and follow data retention schedule for zero hours workers. GDPR principle: don't keep data longer than necessary. Retention periods: Tax/payroll records: 6 years after employment ends (HMRC requirement), Right to work documents: 2 years after employment ends (Home Office), Accident records: 3 years from incident (adults) or until 21st birthday (minors), Unsuccessful applications: 6 months. Delete data securely when retention period expires. Zero hours workers may have many short engagements - track carefully. Excessive retention risks ICO action. Create deletion procedures and calendar reminders.
🟡 Important
⚡
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Next Steps
Now that you've reviewed the compliance checklist, you have three options:
✅ Use Our Ready-Made Template (Recommended)
Save hours of legal research and drafting. Our professionally-crafted zero hours contract covers all 27 compliance points with legally-sound wording. It includes exclusivity ban compliance, holiday accrual calculations, tax/NI guidance, insurance requirements, and GDPR provisions. Available in both Interview Mode (guided) and Editor Mode (direct editing) for just £10.
📝 Draft Your Own Contract
Use this checklist as your guide, but remember: getting the legal wording correct is complex. Exclusivity clauses, holiday pay calculations (12.07% method), worker classification, IR35 considerations, and Working Time Regulations require precise language. A single error can result in tribunal claims, HMRC penalties, or HSE prosecution.
⚖️ Book a Legal Consultation
For complex situations, large-scale zero hours workforce, or IR35 concerns, consider booking a consultation with our legal professionals for personalized advice tailored to your specific circumstances.