The Fair Work Agency has got zero hours in its sights. Do you?

The chair of the Fair Work Agency, Matthew Taylor, probably couldn't have put it any better on July 8th 2026, when he told the room that right now is a "very particular time" for the UK's contingent labour sector.

That was arguably an understatement. Taylor's message to me, and the other experts in the room at the Freelancer & Contractor Services Association (FCSA) Forum, landed against a legislative backdrop that's anything but light.

For those operating in the contingent labour market, the issue is no longer whether reform is coming, but how prepared the supply chain will be when enforcement expectations harden, writes Chris Bloor, compliance director at Sapphire.

Key takeaways

• The Fair Work Agency (FWA) could fine employers up to £20,000 per worker for failing to make required short-notice shift payments — mirroring how minimum wage penalties already work.
• Operational since April 7th 2026, the FWA is already preparing to enforce both zero-hours rules and umbrella company regulation, chair Matthew Taylor confirmed at the FCSA Forum.
• Taylor stressed that a flexible labour market must still "feel fair" to workers — but was equally clear that whatever rules government lands on, there's "no point" in them unless they're actually enforceable.
• Employment lawyer Hannah Morrison (Brabners) has a simple message for contractors facing the zero rights consultation: "Respond, respond, respond" — and don't assume your agency or end-client will, since she says she's "not sure" they're even aware of the risk themselves.
• Chris Bloor's bottom line: businesses should treat the remaining Employment Rights Act consultations as a strategic risk and governance opportunity, not a procedural exercise. Those that engage early will be better placed to influence workable rules, protect contractors and demonstrate credible supply-chain compliance before enforcement begins.
• Two Employment Rights Act consultations are currently open: zero-hours reform closes August 25th 2026, workplace surveillance technologies closes September 30th 2026.

A packed legislative agenda for contractors

My view is that the UK contractor sector is now at the point at which compliance stops being a back-office safeguard and becomes a commercial differentiator. The organisations that understand the direction of travel now — and can evidence how they govern flexible labour across the supply chain — will be the ones best placed to retain trust, win work and avoid being caught out by FWA enforcement once the rules crystallise.

Affecting contractors and their partners as the third quarter of 2026 gets underway is no small legislative medley:

• The Employment Rights Act 2025
• HMRC's Joint & Several Liability rules (now bedding in)
• Zero Hours Contract Reform (part of the Employment Rights Act 2025) — see my full breakdown of what the consultation proposes for the details
• The Agency Conduct Regulations consultation (now closed).

The Employment Rights Act (ERA) alone is so significant that, on June 30th 2026, Sapphire convened tax, legal and contractor specialists to examine zero hours as a standalone issue. That discussion reinforced a point I think the wider market now needs to confront: the businesses most likely to adapt well are those engaging with the detail before the final rules are settled, not those waiting for FWA enforcement guidance after the fact.

And at a time when the ERA is even being linked to a boost in outside-IR35 roles, it's clear that ContractorUK readers need to come forward and help shape it.

But they won't be shaping it alone.

The Fair Work Agency is already preparing to enforce zero hours rules

A former director of UK Labour Market Enforcement, Taylor used his keynote address to the FCSA Forum to confirm that "preparation for each stage" of the Fair Work Agency's work — notably "umbrella company regulation" and "zero hours contracts" — is already underway.

The FWA has moved quickly for a government organisation that has only been operational since April 7th 2026 (Taylor joked that he avoided opening the FWA's doors on April 1st, for "obvious reasons"). Add holiday pay enforcement, which he called a "big and complex" piece of work for the FWA to undertake, and the result, he said, will be a Fair Work Agency-approved "ecosystem of compliance."

Taylor's reassurance: flexibility must still "feel fair"

To try to head off any concerns from contractors, Taylor also stressed that he recognises the importance of a flexible and fair labour market — one that "feels fair" to the people working in it. The author of the Good Work Review offered further reassurance to the FCSA Forum: "In the end, it's the government that decides what the regulations should be, but there's no point if they're not enforceable."

Why contractors should respond to the zero hours consultation

That's where I think agencies, end-clients and contractors can come into their own, through the consultation processes tied to the ERA that are still open (Editor’s Note: A workplace surveillance technologies consultation, also part of the ERA, closes on September 30th 2026).

We said this much at our June 30th seminar: the detail will ultimately determine how businesses adapt in practice.

Crucially, the opportunity to help shape the final regulations on zero hours is open until August 25th. In my view, this is where responsible contractor supply chain businesses should be leaning in. Early engagement is not just about responding to government; it is about testing how the proposals will work in real supply chains, identifying operational friction before it becomes a compliance failure, and showing workers, agencies and clients that flexibility and fairness can be managed together.

And it's not just the Fair Work Agency shaping these reforms with its own inevitable input to the zero hours consultation. There’s deep legal expertise working behind the scenes, too. At Sapphire’s seminar, Brabners lawyer Hannah Morrison said she agrees that contractors and businesses must take advantage of the opportunity to have their say while it still exists.

‘Respond, respond, respond’: a lawyer's warning to contractors

Morrison was at the FCSA Forum, as well, sharing the stage after Matthew Taylor’s keynote, in which he said, repeatedly, that educating businesses and individuals so they achieve compliance of their own accord is “preferable” and “better” in the FWA’s eyes than its officials taking enforcement action.

"RESPOND, RESPOND, RESPOND," Morrison told me and other FCSA Forum attendees of the zero hours consultation because, she said, while the UK doesn't yet know exactly what the zero hours legislation will look like, contractors and others need to accept that something is going to happen on zero hours — and it's simply a question of what that something is.

"I think it's right that something is done on zero hours to protect workers," the Brabners lawyer said on July 8th. "But the proposals are a sledgehammer to crack a nut."

Are the government's zero hours proposals complicated?

Morrison called aspects of the government's proposals “mind-bogglingly complicated” and “administratively burdensome.” The zero hours consultation even includes a “spaghetti soup of a definition,” she said.

And if contractors need a further reason to come forward to respond, Morrison warned that she's "not entirely sure how much thought has been given by the state" on the changes to zero hours and similar contracts. There’s even the prospect that the guaranteed hours offer of work will be made by umbrella companies to their own contractors.

Who's excluded from the new guaranteed-hours rules?

As to where contractors might wish to focus their response before August 25th, Morrison pointed to several exclusions already built into the zero hours reform proposals, notably:

• Agency workers of a specified description
• Certain circumstances in which the duty to make a guaranteed-hours offer would not apply to hirers
• Circumstances where the responsibility to offer agency workers guaranteed hours would fall to the agency or another intermediary — for example, a party involved in the supply or payment of an agency worker — instead of the hirer

What should contractors concerned about ‘zero hours’ do next?

As to what contractors and others should do next, Morrison's advice to the FCSA Forum was straightforward:

• Respond, respond, respond
• Raise issues not addressed in the consultation
• Encourage agencies and end-clients to respond too.

Why should contractors ask agencies and hirers to speak up on zero hours?

I'd especially endorse this third recommendation. Contractors nudging their recruitment agencies and end-clients to come forward is especially important, given:

• Liability will sit with the party responsible for the short-notice payment
• The consultation proposes that the FWA could penalise employers up to £20,000 per worker for failing to make a short-notice payment — mirroring how minimum wage penalties already work.

At the FCSA Forum, Brabners’ Hannah Morrison gave her reasoning for contractors getting their partners to speak up. She told the forum that she was, a bit worryingly, "not sure agencies and end clients are necessarily across this".

A shift from one-off compliance to continuous monitoring

The labour supply chain has navigated major compliance change before, and that experience may now prove valuable.

Rather than tip stakeholders into overwhelm, the four frameworks I referenced at this article’s introduction are invariably forcing everyone in the contingent work economy to be more informed than ever.

Indeed, thanks to HMRC’s JSL, and then the proposed changes to the Conduct Regulations (feedback from contractors and others is now being assessed by the government), there's a clear shift away from traditional, one-off compliance exercises, and towards:

• ongoing assurance
• monitoring
• governance across supply chains.

The Employment Rights Act is now accelerating that move towards greater oversight, stronger governance frameworks and continuous compliance monitoring. For me, this is the defining compliance shift for the contingent labour market: assurance can no longer be treated as a document collected at onboarding, but as an operating discipline that is evidenced, reviewed and challenged throughout the supplier relationship.

Therefore, "one and done" is increasingly a thing of the past for organisations operating with contingent labour.

What did Matthew Taylor just say about playing by the rules?

Contractors, too, may be helping companies become more attuned to the sense that "playing fast and loose with the rules" — a phrase Matthew Taylor used in his FCSA Forum keynote — is to massively go against the grain.

A former CEO of the Royal Society of Arts, Taylor told the forum that one of the Fair Work Agency's aims is to ‘restore public trust in government, given that the public has not always seen the rules of the day enforced.’ As someone who has spent 13 years working across assurance, legal and compliance roles, I see that as the central issue for our market too: rules only build trust when they are understood, evidenced and enforced consistently.

Is contingent labour law reshaping procurement?

Just be aware if you're a nay-sayer: the changing legal landscape for the contingent economy — where companies are increasingly expected to demonstrate not only that they have appropriate controls in place, but that those controls are actively monitored and reviewed on an ongoing basis — is already having an influence.

It's showing up in procurement decisions, Preferred Supplier List strategies and supplier selection.

Transparency, governance and demonstrable compliance capability are no longer peripheral assurances; they are becoming commercial differentiators. Agencies and end-clients increasingly want partners who can evidence how risk is controlled in practice, not just merely promise that the right policies exist.

Why Acacium Group says engaging with the zero hours consultation is critical

He wasn't at the FCSA Forum, but I'd like to end with a word from Charles Harradine, a director at Acacium Group, a recruitment and delivery company for the healthcare sector, who spoke to me for the purposes of this ContractorUK article.

Harradine told me: "Many organisations are already adapting to the increased scrutiny and governance expectations created by Joint & Several Liability.

"And the Employment Rights Act introduces the next phase of change for the UK's contingent labour market.

"For agencies and workforce providers, understanding how guaranteed hours and predictable working arrangements will interact with flexible staffing models will be critical. Engaging with the [zero hours] consultation is one of the best ways to ensure practical industry experience informs the final framework."

My bottom line: don't leave Employment Rights Act engagement too late

Informed by the clear priorities of the FWA, which Matthew Taylor eloquently shared this month, my own take is this: businesses that wait for the final regulations before acting will be on the back foot. Agencies, end-clients, umbrella companies and contractors should use the remaining ERA consultations to shape workable rules now, while also reviewing how their own governance, assurance and contractual controls would stand up once those rules are enforced by the FWA. That is the best way to protect workers, preserve contractors’ operational flexibility and build trust across the UK's contingent economy.