Taylor Review: UK employers ‘should pay premium rate for zero hours contracts’

The aim is to encourage “lazy” employers to take more responsibility for the risks facing their workers due to “one-sided flexibility”.

The Taylor Review is considering whether to force UK employers to pay a premium rate for zero hours contracts in a bid to deter abuse of the system.

Matthew Taylor, head of a government review into employment practices in the gig economy and other new forms of work, suggested that companies should top up the minimum wage for hours that are not guaranteed in advance as a possible means of addressing issues around “one-sided flexibility” for workers.

He told the Financial Times newspaper: “The problem in the labour market is not security of work – it’s security of income. We’ve been hearing today about people in the social care sector who are told ‘be ready to leave the house at seven in the morning’. Then a phone [comes to say]: ‘No, we haven’t any work for you today.’”

Official figures indicated that there were 905,000 people working on zero hours contracts in the final quarter of 2016, 101,000 more than the previous year. The Review has described the position of such workers as “precarious”.

Taylor continued: “I think we can encourage employers to be a bit less lazy around transferring risk, even if it means it offers 15 hours a week rather than one hour.”

But he stressed that the idea was still up for discussion. Other proposals that he has floated since hearing evidence from interested parties include creating a newly-defined ‘worker’ status to provide a greater distinction between employed and self-employed people and moving the responsibility of defining employment from individuals to their employers.

There are fears that the timings of the Taylor Review may be affected by the snap general election on 8 June. Under so-called purdah rules, which prevent the government from announcing any new initiatives or legislation for six weeks before the election, it has been suggested that the Review could be delayed or possibly even suspended.