If you work through an umbrella company, you might have heard talk about “guaranteed hours” and wondered what it means for you. The government has launched a consultation on zero-hours and low-hours contract reforms, and while these changes weren’t designed with umbrella contractors in mind, they could affect how you work.
Here’s what you need to know about the guaranteed hours consultation, why umbrella contractors should pay attention, and how SmartWork is staying ahead of these potential changes.
Background: The Employment Rights Act and Guaranteed Hours Proposals
The UK government is implementing the Employment Rights Act 2025 in phases, with each phase introducing new worker protections and employment standards. The latest consultation, launched on 2 June 2026 and open until 25 August 2026, focuses on reforms to zero-hours and similar contracts.
The government’s stated aim is to end “one-sided flexibility” situations where employers can vary workers’ hours without providing security or predictability. The proposals centre on three key rights:
- Guaranteed Hours: Workers would be offered a contract reflecting their actual working patterns over a reference period (likely 12 weeks). If someone regularly works 25 hours per week, they’d be offered a contract guaranteeing those hours.
- Reasonable Notice of Shifts: Employers would need to provide advance notice of shift schedules (the consultation is exploring notice periods ranging from 1 to 4 weeks).
- Compensation for Short-Notice Changes: If shifts are cancelled, moved, or cut short at short notice, workers would receive compensation.
These measures are primarily targeted at the approximately 1.13 million UK workers on traditional zero-hours contract roles in which employers provide no guarantee of work but expect availability.
Why This Affects Umbrella Contractors (Even Though It Wasn’t Designed for Them)
Here’s where it gets important for umbrella contractors: you are legally employees of your umbrella company.
While your working model is very different from a retail worker on a zero-hours contract, the law treats umbrella employment as employment. This means regulations designed for traditional employees often apply to umbrella contractors, even when the working reality is quite different.
Under the proposed reforms, umbrella companies would be required to:
- Track contractors’ working patterns over reference periods
- Offer guaranteed hours contracts when certain thresholds are met
- Provide advance notice of assignments
- Potentially compensate for cancelled or changed placements
The key concern? These requirements don’t align with the flexible, project-based nature of contracting. Most contractors choose umbrella companies specifically for flexibility to move between assignments, control their schedules, and select projects that suit their expertise and availability.
What Could Change: Specific Implications for Contractor Flexibility
While details are still being shaped through the consultation, here are the potential implications for umbrella contractors:
The Guaranteed Hours Mechanism
If you regularly work above a certain threshold (the government is considering 8-20 hours per week) over a reference period (likely 12 weeks), your umbrella company would be legally required to offer you a contract guaranteeing those hours.
Important clarification: You would not be forced to accept guaranteed hours. The right is to receive the offer, and you can decline if you prefer to maintain flexibility. However, your umbrella company must still make the offer, creating new administrative processes.
Assignment Predictability
The shift notice requirements could affect how quickly you can start new assignments. If “reasonable notice” is defined as two to four weeks, it could impact:
- Short-notice contract opportunities
- The ability to quickly move between projects
- Emergency cover or urgent roles
Financial Implications
If an end-client cancels or shortens an assignment at short notice, compensation requirements could come into play. While this might offer some income protection, it also adds complexity to the triangular relationship between contractor, umbrella company, and end-client.
The Flexibility Trade-Off
Many contractors value the ability to take breaks between assignments, ramp up or down their hours, and maintain control over their working patterns. Guaranteed hours reforms, while well-intentioned, could inadvertently limit this flexibility by imposing structures designed for traditional employment relationships.
The Consultation Process: Why Feedback Matters
The current consultation phase is crucial because it’s determining how these reforms will work in practice, not whether they’ll happen. The Employment Rights Act 2025 has already received Royal Assent—now the government is seeking industry input on implementation details.
Key questions the consultation is asking include:
- What should the hours threshold be? (8, 12, 16, or 20 hours per week?)
- How long should reference periods last? (8, 12, or 16 weeks?)
- What constitutes “reasonable notice” for shifts? (1, 2, 3, or 4 weeks?)
- How should compensation for cancelled shifts be calculated?
- Should certain worker types be excluded or exempted?
This is where your voice matters. The government needs to understand how these reforms would affect real-world contracting arrangements. Industry bodies like the FCSA (Freelancer and Contractor Services Association) are gathering data and feedback to represent the umbrella sector in their formal consultation response.
If the regulations don’t account for the unique nature of umbrella contracting, they could inadvertently make flexible working arrangements less viable – the opposite of what many contractors need.
SmartWork’s Position: Supporting Contractor Choice and Flexibility
At SmartWork, our position on the guaranteed hours consultation is clear and balanced:
We understand the government’s aims. Employment security is important, and protections against exploitative practices are necessary. The reforms address real issues facing workers on zero-hours contracts who want stability but are given none.
We also value contractor choice. The umbrella model exists because contractors want flexibility, autonomy, and professional working arrangements. These are positive choices that enable people to build portfolio careers, balance other commitments, and control their professional lives.
We’re committed to compliance and transparency. Whatever the final regulations look like, SmartWork will implement them fully while maintaining the service quality and support you expect. We’re actively monitoring the consultation process and staying engaged with industry developments through our FCSA membership.
We believe in informed contractors. The more you understand about regulatory changes, the better positioned you are to navigate them and make choices that work for you. That’s why we’re committed to keeping you updated throughout this process.
What Contractors Should Know: Practical Takeaways
Here’s what you should understand right now:
No Immediate Changes
This is a consultation, not immediate law. The proposals won’t take effect until 2027 at the earliest, and the final regulations may look different from the current proposals based on consultation feedback.
You’re Not Alone in This
The FCSA is representing the umbrella industry in the consultation response. Recruitment agencies, end-clients, and other stakeholders are also weighing in. The government will hear multiple perspectives before finalising regulations.
Your Working Model Has Value
The flexibility you enjoy through umbrella employment isn’t a loophole or a workaround. It’s a legitimate working arrangement that suits modern professional services. Any reforms should recognise this value alongside providing necessary protections.
Guaranteed Hours Are an Offer, Not an Obligation
If these reforms are implemented as proposed, you would have the right to guaranteed hours if you meet the criteria, but you wouldn’t be forced to accept them. The choice would remain yours.
Stay Informed and Engaged
Keep an eye on developments, ask your umbrella company (like SmartWork) about how they’re preparing, and make sure your voice is heard if there are opportunities to provide feedback.
Conclusion: Next Steps and Staying Informed
The guaranteed hours consultation represents a significant moment for the umbrella sector. While uncertainty remains about exactly how these reforms will apply to contractors, what’s certain is that change is coming.
The consultation closes on 25 August 2026. Between now and then, the FCSA and other industry bodies will be submitting detailed responses advocating for regulations that protect workers while preserving genuine flexibility.
What SmartWork is doing:
- Monitoring all consultation developments and regulatory updates
- Engaging with the FCSA consultation response process
- Preparing our systems and processes for potential changes
- Keeping contractors informed through regular updates
What you can do:
- Stay informed: Sign up for SmartWork’s regulatory updates to receive timely information about changes that affect you
- Ask questions: If you’re unsure how these proposals might impact your working arrangements, get in touch with our team
- Choose compliance: Working with an FCSA-accredited umbrella company like SmartWork ensures you’re with a provider that maintains the highest standards and stays ahead of regulatory change
The umbrella contracting model has always evolved alongside regulatory frameworks. Whatever the outcome of this consultation, SmartWork remains committed to providing compliant, transparent umbrella services that support your professional goals while respecting your need for flexibility.
Have questions about the guaranteed hours consultation or how it might affect you? Contact SmartWork today, or sign up for our updates to stay informed as this process unfolds.
About SmartWork
SmartWork is an FCSA-accredited umbrella company providing compliant, transparent payroll services for contractors across the UK. We combine expert compliance with responsive, personal support, keeping you informed, protected, and in control of your contracting career.
Get in touch: Visit smartwork.com to learn more or speak with our team about how we support contractors through regulatory change.
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