Labour's proposed crackdown on zero-hour contracts could cost businesses nearly £3bn each year, according to a government impact assessment. The reforms, which include offering guaranteed-hour contracts to flexible employees and paying workers for cancelled shifts, could cost British firms as much as £2.9bn annually.
The assessment also indicates that the net average cost to the economy, considering alleged economic benefits, would be between £300m and £1.4bn. A more conservative "central" costing scenario estimates the total annual cost to firms at £1.1bn.
Specific measures include a potential annual cost of up to £450m for the right to guaranteed hours. The right to reasonable notice of shifts could cost up to £1.2bn per year, while rules requiring bosses to pay for shifts cancelled at short notice could cost up to £1.3bn annually.
The Federation of Small Business (FSB) has criticised the government's approach, with interim chair Tina McKenzie calling for a pause to the reforms. Helen Dickinson, chief executive of the British Retail Consortium, warned that the costs could not come at a worse time for retailers already facing increased employment costs.