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Workers on zero-hours contracts earn £1,000 a year less than permanent employees

Zero-hours contracts typically generate for workers earnings with £1,000 a year less than the salaries of permanent employees, revealed Resolution Foundation research.

According to the analysis, people on the controversial contracts face, on average, a “precarious pay penalty” of 6.6%, or 93p an hour, while for those who are paid the least, the size of the gap is even greater, at 9.5%.

“Understanding the reasons behind this pay penalty will be crucial in order to tackle some of the challenges raised by new forms of employment, without jeopardising the success of the UK’s flexible jobs market,” it said in a foundation’s statement.

The “pay penalty” of zero-hours contracts was “a big price to pay for work that too often lacks the security workers desire”, said Laura Gardiner, senior policy analyst at the Resolution Foundation, according to BBC.

“Zero-hours contracts have hit the headlines in recent months for their widespread use in Sports Direct and JD Sports. But concern about the use and abuse of zero-hours contracts goes far wider than a few notorious firms. There is mounting evidence that their use is associated with a holding down of wages”, she added.

Zero-hour contract is, according to Wikipedia, a type of contract between an employer and a worker, where the employer is not obliged to provide any minimum working hours, while the worker is not obliged to accept any work offered. It is often used in agriculture, hotels and catering, education, and healthcare sectors. In the UK this type of contract is controversial, although a significant number of employees work on zero-hours contracts, supported by many business leaders because they provide a flexible labour market.

Madeline Gorthon