Hospitality employers: have your say on workforce reform
Hospitality has a rare opportunity to influence employment reforms before they become law. With consultation deadlines fast approaching, operators should take the chance to ensure the sector’s unique workforce challenges and realities are reflected in the final legislation.
The government’s Make Work Pay programme continues to gather pace, and two significant consultations currently open for responses could have far-reaching implications for hospitality operators across the UK. The consultations focus on ending one-sided flexibility in zero-hours and low-hours arrangements, and, strengthening holiday pay compliance and enforcement through the proposed Fair Work Agency.
For an industry that depends on agile staffing models, seasonal demand and variable trading patterns, these proposals are particularly important. While the objectives of improving worker security and ensuring compliance are understandable, the practical realities of hospitality operations must be fully considered if the final regulations are to work effectively for both businesses and employees.
Ending one-sided flexibility: what does it mean for hospitality?
The consultation on ending one-sided flexibility seeks views on how new rights introduced under the Employment Rights Act 2025 will operate in practice. These include rights to guaranteed hours, reasonable notice of shifts and compensation where shifts are cancelled, shortened or moved at short notice.
Hospitality businesses often rely on flexible labour models to manage fluctuating demand, weather impacts, major events, seasonal peaks and unforeseen absences. Many employees also value flexibility, particularly students, parents and those seeking supplementary income.
The challenge for employers will be ensuring that workforce planning remains commercially viable while meeting new legal requirements.
Seasonal demand cannot be ignored
The hospitality sector’s workforce requirements are fundamentally different from many other industries. Demand is rarely consistent throughout the year and can fluctuate dramatically due to weather patterns, tourism activity, bank holidays, major events and Christmas trading. For some operators, staffing levels during peak periods can be significantly higher than during quieter months.
This reality is particularly important when considering the proposed right to guaranteed hours. If future regulations do not properly reflect seasonal trading patterns, employers could find themselves committing to staffing levels that exceed operational requirements during off-peak periods. Equally, workers who value the ability to increase hours during busy periods and reduce commitments at other times could lose some of the flexibility that currently benefits both parties.
The government is specifically seeking views on how seasonal work should be treated and what reference periods should be used when calculating guaranteed hours. For hospitality employers, these could become some of the most important decisions emerging from the consultation.
Holiday pay enforcement moves centre stage
While the proposed reforms to flexible working arrangements have attracted most of the headlines, hospitality employers should not underestimate the significance of the government’s separate consultation on holiday pay compliance and enforcement. The proposals would give the new Fair Work Agency powers to investigate and enforce statutory holiday pay rights, creating a far more proactive enforcement regime than many employers have experienced to date.
For hospitality businesses, the stakes are particularly high. Few sectors have such a complex mix of variable hours, overtime, casual working arrangements, service charge payments and fluctuating earnings. As a result, holiday pay calculations can be challenging, especially for employers managing large workforces across multiple sites.
The introduction of a dedicated enforcement body is likely to increase scrutiny of payroll practices and could expose historic compliance issues that may previously have gone unnoticed. For operators already facing rising employment costs, labour shortages and continuing pressure on margins, the financial and reputational impact of holiday pay investigations could be significant.
Now is the time for employers to review their holiday pay arrangements, test payroll processes and ensure calculations are keeping pace with legal requirements. Businesses that act early will not only reduce compliance risk but will be better positioned when the Fair Work Agency begins exercising its enforcement powers.
Why hospitality voices matter
The hospitality sector employs millions of people and has unique workforce characteristics that differ considerably from many other industries. Labour demand can change hourly, weekly and seasonally, often influenced by factors beyond an employer’s control.
Without meaningful sector input, there is a risk that regulations designed to protect workers could inadvertently reduce flexibility valued by both employers and employees.
What should employers do now?
- Review current use of zero-hours and variable-hours arrangements.
- Assess scheduling, cancellation and shift notification practices.
- Check holiday pay calculations and payroll controls.
- Identify areas where proposed reforms could create operational challenges.
- Submit responses to the consultations directly or through industry bodies and advisers.
How we can help
The outcome of these consultations is likely to shape employment practices across hospitality for years to come. Understanding the potential impact now will help businesses prepare, manage risk and influence the final direction of reform.
If you would like support reviewing your workforce arrangements, assessing holiday pay compliance, preparing consultation responses or understanding how these changes may affect your business, please speak to our hospitality employment and people advisory specialists. We would be delighted to help you navigate the evolving employment landscape with confidence. Get in touch with us at cclarke@mks.co.uk.
Closing 25 August 2026: Make Work Pay: ending one-sided flexibility – reforms of zero hours and similar contracts
Closing 22 September 2026: Make Work Pay: holiday pay compliance and enforcement
