Zero hours contract staff earn £1,000 a year less than other staff doing the same job

A new report shows zero hours workers suffer a 'precarious pay penalty'

Tom Peck
Friday 30 December 2016 01:15 GMT
Mike Ashley's Sports Direct was widely criticised for its use of zero hours contracts
Mike Ashley's Sports Direct was widely criticised for its use of zero hours contracts

Zero hours contract workers earn £1,000 less a year than colleagues doing exactly the same job, according to new study.

Research by The Resolution Foundation shows that staff on the notorious contracts, which do not guarantee staff any work whatsoever, face a "precarious pay penalty" of around 6.6%, or 93p an hour. Those in the very lowest paying jobs receive 9.5% less.

Zero hours contracts are precisely what they sound like. A contract to work, but with zero work guaranteed within it. Staff, most commonly in retail and service jobs, are only called upon to work when there is demand for it. They must be available to work, but regularly find there is no work for them to do. Therefore they don't get paid.

The foundation’s research concludes that the growing prevalence of these contracts is not only discriminating against those who hold them in comparison with their full time of even part time colleagues, but keeping average wages down across the country.

Laura Gardiner, Senior Policy Analyst at the Resolution Foundation, said: "Zero hours contracts have hit the headlines in recent months for their widespread use in Sports Direct and JD Sports.

"But concern about the use and abuse of zero hours contracts goes far wider than a few notorious firms. There is mounting evidence that their use is associated with a holding down of wages.

"While some people value the flexibility offered by zero hours contracts, they also carry a significant precarious pay penalty that can cost workers around £1,000 a year. That's a big price to pay for work that too often lacks the security workers desire.

"As new ways of working continue to grow - from ZHCs and agency work to the gig economy and wider self-employment - we need a better understanding of how they help or hinder people's earnings and career prospects.

"Policy makers must also tread a careful path between getting to grips with the living standards challenges thrown up by new and often insecure forms of employment, without jeopardising Britain's recent job-creating success."

TUC general secretary Frances O'Grady commented: "Zero hours workers suffer the double whammy of lower pay and fewer rights at work.

"Far too many workers have no power to stand up to bad bosses."

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