New figures out on zero-hours contracts – what do we now know?

New ONS figures suggest there were 1.4 million zero-hours contracts (more precisely, employee contracts that do not guarantee a minimum number of hours) providing work in January-February 2014.

Didn’t they previously say 583,000 people were on zero-hours contracts?

That was an estimate based on the ONS Labour Force Survey, which ONS urged should be treated “with due caution” pending the publication of today’s figures. There are good reasons to be sceptical of the Labour Force Survey estimate, not least the fact that many people may fail to correctly identify their contractual arrangements or may not recognise the term ‘zero-hours contract’. Today’s estimate of 1.4 million is more reliable since it involved directly asking employers how many people were employed on contracts that “do not guarantee a minimum number of hours”. It also counts contracts rather than people, since one person may be employed by several employers.

But how many people on these contracts actually get work?

The 1.4 million figure refers to those contracts which did provide work in the fortnight covered by the survey of employers. It excludes those employment contracts not providing work in this period, of which ONS estimates there were around 1.3 million. ONS points out these contracts are a lot harder to analyse since they will include people with several contracts with different employers, people who have left an employer but remain on their records, people on leave or sick or who do not want to work (etc), in addition to employees who were not offered any work. So some, but not all, of these people ought to be added to the headline 1.4 million figure. ONS plans to investigate further and report back later in the year.

Ok – so how many of the 1.4 million live in my area?

Unfortunately the UK figure cannot be broken down by region (or local authority, or constituency) owing to the way the data have been collected.

Well, can you tell me how many young people are on zero hours contracts?

We can’t do that breakdown either – the survey did not ask employers about the characteristics of zero-hours contracts employees. We have to turn to the Labour Force Survey, which suggests that over a third of people on zero-hours contracts are aged 16-24.

So can you tell me anything about who these 1.4 million are?

The survey might not give information on personal characteristics of employees, but it does offer some interesting information on which employers do use zero-hours contracts. Around 13% of employers make some use of these contracts, but this very much depends on the size of the business – almost half of businesses with 250 employees or more have at least some employees on these contracts.

Furthermore, we know zero-hours contracts are most common in the Accommodation and Food Services industry, where 45% of businesses make some use of them. 26% of employees on zero-hours contracts work in the Accommodation and Food Services sector. 25% work in the Administration and support services sector, including some people at employment agencies who are placed with employers in other sectors.

Will ONS publish further estimates?

A further survey of businesses will be carried out during summer 2014, with results expected by the end of the year. Also, look out for further analysis of those contracts not providing work in the survey reference period.

You can read more about zero-hours contracts, including developments in policy, in the Library’s standard note.

Feargal McGuinness