Zero Hours Contracts and Sick Pay: What UK Employers Need to Know

Zero hours contracts have become an increasingly common choice for UK businesses that rely on flexibility-especially in hospitality, retail, and other industries with fluctuating staffing needs. But when a worker on a zero hours contract falls ill, questions about sick pay can begin to pile up. Can zero hours workers access Statutory Sick Pay (SSP)? What are your obligations as an employer? What risks do you face if you get it wrong?

Understanding how sick pay rules apply to zero hours contracts is crucial for staying compliant and maintaining positive workplace relations. In this guide, we’ll break down what zero hours contracts actually mean, when sick pay applies, how to calculate it, and key legal pointers to ensure your business is fully protected.

If you’re an employer navigating the world of zero hours contracts, keep reading to get practical clarity on your duties, how to support your staff, and when to seek expert advice.

What Is a Zero Hours Contract?

Before we get into the nitty-gritty of sick pay, it’s important to be clear on what a zero hours contract actually is.

A zero hours contract is a type of employment agreement where the employer isn’t obliged to guarantee any minimum number of working hours. In turn, the worker is not obliged to accept every shift offered. This makes it a popular choice for businesses with varying demand, such as:

• Restaurants and cafes
• Retail shops
• Event companies and caterers
• Caring and support services

Under a zero hours contract, individuals can technically be classified as an “employee” or “worker.” This distinction matters greatly-employees have a broader range of rights compared to workers (including protection from unfair dismissal, redundancy pay, and more), whereas workers have core rights such as minimum wage, paid holiday, and protection from discrimination.

If you’re considering hiring staff on this type of arrangement, you’ll want to have a professionally drafted employment contract or contractor agreement in place to define the relationship and clarify expectations.

Do Zero Hours Workers Qualify for Sick Pay?

One of the most common questions we hear from employers is: “Do you get sick pay on a zero hours contract?”

The answer is-yes, sometimes. Let’s explain.

Whether someone on a zero hours contract is entitled to Statutory Sick Pay (SSP) depends on a few key factors:

• Status: Both “employees” and “workers” can qualify for SSP, as long as they meet certain conditions (explained further below). In most zero hours arrangements, your staff will meet the definition of “worker,” but if their contract or working patterns look more like employment, they could be classified as employees.
• Earnings threshold: To be eligible for SSP, the worker must earn an average of at least £123 per week (2024-25 tax year) before tax, over an eight-week period prior to falling ill.
• Illness period: Staff must be off work for four or more consecutive days (including non-working days)-known as a “period of incapacity for work”.

If these conditions are met, zero hours staff are legally entitled to receive SSP, just like any other part-time or full-time employee.

How Does Statutory Sick Pay (SSP) Work for Zero Hours Contracts?

The rules for SSP can seem complicated when there are no guaranteed hours, so let’s break it down:

What Is SSP?

Statutory Sick Pay is the minimum amount you must pay eligible staff who are too ill to work, for up to 28 weeks. As of April 2024, the SSP rate is £116.75 per week.

SSP Eligibility Criteria for Zero Hours Workers

For staff on zero hours contracts, the same SSP rules apply as for other staff, as long as:

• They are classified as “employees or workers” (not genuinely self-employed)
• They have done some work for you
• Average weekly earnings meet the £123 threshold in the previous eight weeks (if they’ve worked for you for less than eight weeks, use their actual average earnings in that time)
• They are off sick for at least four consecutive “qualifying days”

Note: Qualifying days are days they are expected to work, or have previously worked, under the contract-so you’ll need clear rotas and contract terms to work this out.

How Is SSP Calculated on a Zero Hours Contract?

SSP is calculated based on qualifying days rather than contracted hours. For zero hours staff, use the shifts or days they would usually be scheduled for.

If they earn more in some weeks and less in others, you’ll need to work out their average weekly earnings. HMRC offers an SSP calculator, or you can use payroll software designed for this purpose.

Common Scenarios

• Scenario 1: A zero hours worker routinely works Monday to Wednesday, earning £150 per week. They fall ill and are booked off for a week. They meet the earnings threshold and SSP applies for their qualifying days.
• Scenario 2: A zero hours worker picks up ad-hoc shifts a couple of times per month, never averaging above £123 per week. When they call in sick, they don’t qualify for SSP.

If you need more guidance around payroll compliance or unusual employment scenarios, it’s always wise to consult a legal expert on contract and employment law.

Do Employers Have to Offer Enhanced Sick Pay on Zero Hours?

Your minimum legal obligation for zero hours contracts is to pay SSP (if your worker is eligible). However, you can offer an enhanced sick pay policy if you wish.

Many employers-especially larger or more competitive workplaces-provide contractual sick pay that is more generous than SSP. For example, you might offer full pay or half pay for a set period of sickness absence. If you decide to offer this, it should be clearly stated in your employee handbook or staff policy, and apply consistently to all staff of similar status to avoid discrimination risks.

Remember, offering additional sick pay on a discretionary basis (without a clear written policy) can create legal risks and confusion-be sure to get advice on drafting workplace policies.

Record-Keeping, Evidence, and Notifying Sick Leave

Proper record-keeping is essential for all workers, especially those on zero hours contracts. Here’s what you’ll need to do:

• Keep track of all shifts/days worked to assess eligibility for SSP
• Maintain clear policies around how to report sick leave (e.g., who to contact, when, and how to provide medical evidence such as a fit note if the absence exceeds 7 days)
• Document all payments and any correspondence regarding sick pay for audit and employment law compliance

This protects both you and your staff if there’s ever any dispute over eligibility, pay, or compliance with your duties under law.

You can read more about drafting effective absence from work policies here.

Risks of Not Providing Sick Pay on Zero Hours Contracts

Failing to pay SSP to qualifying staff can lead to risks far greater than just a disgruntled employee. Here’s why compliance matters:

• Employment Tribunal Claims: Workers denied their rights may bring claims for unlawful deductions from wages or unauthorised non-payment of SSP. This can be costly and damaging to your reputation.
• HMRC Penalties: The tax authority can investigate breaches and apply penalties if you fail to comply with minimum sick pay laws, and require back payments.
• Workplace Morale and Turnover: Consistent, fair sick pay policies foster a positive workplace culture and retention-which are even more important in industries where zero hours staff are vital for meeting demand at short notice.

Ultimately, setting the right policies (and making sure they’re followed in practice) isn’t just a legal duty-it’s also smart business risk management. Find out more about common small business mistakes to avoid here.

Can You Exclude Sick Pay Entitlement by Contract?

The right to receive SSP (if the employee is otherwise eligible) cannot be excluded, waived, or contracted out of. Any clause attempting to do so in your zero hours contract will not be legally enforceable and could land you in hot water.

That being said, it is sensible to outline how sick leave notification works and any evidence requirements, and to clarify how working patterns affect SSP calculations. Templates or policies that are not compliant with employment law should be avoided-you’ll want your staff contracts to be watertight and accurate.

Best Practices for Employers Managing Sick Pay on Zero Hours Contracts

Here are a few tips to ensure your business is fully compliant (and your staff treated fairly):

• Keep accurate and up-to-date records of each worker’s shifts and pay - this is essential for correctly calculating average earnings for SSP.
• Set clear, written policies for reporting sickness - include when and how to notify, and when fit notes are required.
• Train managers or supervisors in the rules - this helps prevent mistakes and inconsistent treatment.
• Review your contracts regularly - employment law on zero hours arrangements is evolving, so make sure all your template documents remain compliant.
• Offer support to sick staff - demonstrating care improves morale and discourages presenteeism (staff working while unwell).
• Seek high-quality legal advice if in doubt - especially for policy wording or complex working patterns.

You can also read our in-depth guide on ending employment contracts fairly to ensure you avoid major legal pitfalls.

Related Legal Considerations for Zero Hours Contracts

If you use zero hours workers, remember that sick pay isn’t the only compliance area to monitor. You’ll also need to be on top of:

• National Minimum Wage calculations on irregular hours
• Paid annual leave rights (yes, zero hours workers accrue holiday pay!)
• Rest breaks and maximum working time under the Working Time Regulations
• Avoiding “exclusivity clauses” in zero hours contracts, which are now banned (except in very rare circumstances)
• Discrimination law-fair and equal treatment of all workers regardless of their contract type

Being proactive about employment rights for zero hours staff will help keep your business safe, ethical, and attractive to reliable workers.

When Should You Seek Legal Help?

Because the rules around zero hours contracts and sick pay can be tricky-including calculating eligibility for SSP, managing inconsistent shifts, and handling disputes-it’s a good idea to double-check your approach with a legal adviser, especially when:

• Drafting or reviewing zero hours contract templates
• Establishing a sick pay (or wider absence) policy
• Unsure about “worker” versus “employee” status for tax or rights purposes
• Facing a potential tribunal or claim from a staff member

Having properly drafted policies and contracts isn’t just about ticking legal boxes-it’s about protecting your business from the unexpected.

Key Takeaways

• Zero hours contract staff may be entitled to Statutory Sick Pay (SSP) if they meet the minimum earnings threshold and other eligibility requirements.
• SSP for zero hours contracts is worked out based on “qualifying days” and the worker’s average earnings over the previous eight weeks.
• You cannot lawfully contract out of SSP for eligible staff-offering more generous sick pay is optional but must be clearly documented.
• Accurate record-keeping, clear reporting policies, and robust contracts are your best defences against disputes and compliance headaches.
• Never assume zero hours means zero rights-workers still benefit from key employment protections, including sick pay and paid holiday.
• Employment laws change-review your documents regularly and seek expert advice if in doubt to ensure your business remains protected from day one.

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If you need tailored advice on zero hours contracts, sick pay, or any other employment law issue, our friendly team is here to help. You can reach us at team@sprintlaw.co.uk or 08081347754 for a free, no-obligations chat about how to protect your business.