The Department for Business and Trade has given UK employers until 11:59pm on 25 August 2026 to shape the biggest change to casual working since the National Minimum Wage. For the women who run cafes, care agencies, salons, cleaning firms and small hotels, the outcome of this consultation will determine how they hire, roster and pay staff from 2027 onwards. It will also determine whether the roughly one million women who work under these arrangements gain genuine security or simply see their hours rewritten on paper.

This reform package is not a technical HR update. The consultation asks employers to decide, in effect, whose flexibility matters more: the business owner juggling a fluctuating order book, or the worker juggling childcare and bills. Ministers will write the answers submitted over the next seven weeks into secondary legislation and into the Acas code that governs day-to-day scheduling. For women in business, the stakes cut both ways.

What the August 2026 consultation actually proposes

The consultation that anchors this reform process, formally titled Make Work Pay: ending one-sided flexibility – reforms of zero hours and similar contracts, opened on 2 June 2026 and runs for twelve weeks. It sits under the Employment Rights Act 2025, which received Royal Assent on 18 December 2025 but leaves the mechanics of the zero hours regime to be settled by regulation.

Four proposals matter most for small employers:

• A duty to offer guaranteed hours to any qualifying worker whose actual hours over a reference period exceeded the hours in their contract.
• A reference period the government is minded to set at twelve weeks, calculated on a rolling basis.
• A right to reasonable notice of shifts, with compensation payable when shifts are cancelled, curtailed or moved at short notice.
• Extension of all of the above to agency workers, with joint responsibility shared between the agency and the end hirer.

The government has confirmed that the substantive provisions will not come into force before 2027. That gives employers a runway of roughly twelve to eighteen months from the close of consultation. The runway is deceptively short once payroll systems, contracts and rota software all need to be reworked.

Why this is a women’s issue, not just an HR one

Commentators often frame this debate as neutral employment law. It is not. Zero hours work in the UK is disproportionately female. According to the Office for National Statistics dataset EMP17, women account for around 54 per cent of workers on zero hours contracts, a larger share than they represent in the workforce as a whole. The sectors where these contracts cluster, care, hospitality, retail, cleaning and early years, are the same sectors where women are over-represented as both workers and small business owners.

Analysis by the Work Foundation at Lancaster University, published in February 2026, put the total number of workers on zero hours contracts in the UK at 1.17 million in 2025, a record high. The Work Foundation also found that women accounted for 81 per cent of the year-on-year growth of 130,000 zero hours workers recorded to May 2025. The number has climbed steadily as employers hedged against economic uncertainty in the run-up to the Employment Rights Act.

For the woman running a twelve-bed care home in Yorkshire, the composition of her workforce is not incidental to the policy question. She almost certainly relies on a rota of part-time, largely female staff, many of whom have caring responsibilities of their own. The consultation will decide whether her rota software has to guarantee those hours after twelve weeks, and whether a cancelled evening shift now costs her a compensation payment.

The numbers at a glance

The employer view: helpful clarity or a handbrake on hiring

The Chartered Institute of Personnel and Development framed the Employment Rights Act as a potential brake on recruitment in its Winter 2025/26 Labour Market Outlook. Its YouGov-fielded survey of 2,082 senior HR professionals ran between 18 December 2025 and 17 January 2026 and found employer hiring intentions weakening alongside rising concern about compliance costs from the Act.

Make UK, the manufacturers’ body, has been sharper. It has warned that shift notice provisions in particular would sit awkwardly with just-in-time production. Hospitality trade bodies have made the same point about seasonality: a coastal cafe owner in Whitby cannot fix rotas twelve weeks ahead when the weather changes the customer count by the hour.

Government analysis has moved as the Bill became an Act. The Employment Rights Act 2025 Economic Analysis, published in January 2026, estimates the direct annual cost to business at around £1 billion a year, a revision from the wider range set out in the October 2024 impact assessment that accompanied the Bill. That cost lands unevenly. Micro-employers with five to ten staff bear proportionately more of it than a national supermarket, because a supermarket already has the workforce management systems the reforms assume.

The Federation of Small Businesses has picked up on that asymmetry in its own submission, arguing that cost estimates calibrated at national scale conceal the disproportionate burden on employers with under twenty staff. Its own polling of members suggests that fewer than one in five micro-businesses currently use scheduling software capable of tracking a rolling reference period. The rest rely on spreadsheets, WhatsApp groups or a paper rota pinned to the kitchen wall.

Where the reforms bite hardest: five sectors dominated by women

The practical geography of these reforms matters because zero hours contracts are not evenly distributed. They concentrate in a handful of industries where women both work and own businesses. Each faces a different flavour of the same problem.

Adult social care. The sector runs on flexible rostering because clients’ needs fluctuate. A twelve-week guaranteed hours obligation will bite hardest here, because a client’s discharge from hospital or a bereavement can remove twenty hours a week from a carer’s rota overnight. Registered managers, the majority of whom are women, will have to redesign contracts around a floor of hours rather than a ceiling.

Hospitality. Cafes, pubs and small restaurants use zero hours contracts to match staff to footfall. The proposed shift notice rules will change the calculus. A cancelled shift on a rainy Tuesday will become a compensable event, not a phone call.

Early years and childcare. Nurseries employ many staff on variable hours to match ratios. Providers, already squeezed by the funded hours settlement, will face a new administrative overhead. Some have told the sector press they will cut casual roles entirely rather than manage the reference period.

Cleaning and domestic services. Contracts are typically short and locations plural. Aggregating hours across sites into a single reference period will require better software than most micro-businesses currently use.

Retail. High-street independents rely on Saturday-only and holiday-cover contracts. The reforms will not ban these, but they will require employers to formalise habitual patterns.

What a woman-led business should do before 25 August

The most useful thing a small employer can do this summer is not to lobby, though lobbying is welcome. It is to model the reforms against the current rota and see what falls out. Three specific exercises repay the time.

First, run a twelve-week look-back on every casual worker on the books. If actual hours worked exceed contracted hours by a meaningful margin, that worker would, under the proposals, be entitled to a guaranteed hours offer. Knowing how many such workers exist changes the negotiating position. For most hospitality and care employers, the number is higher than they expect.

Second, cost a single cancelled shift under the proposed compensation regime. The consultation does not yet fix the compensation figure, but it invites views on how to calculate it and how to define “short notice”. Either way, a rainy-Tuesday cancellation that costs nothing today will cost something in 2027. Build that into pricing now.

Third, respond to the consultation. The GOV.UK consultation page sets out details for submitting responses. Small women-led employers are markedly under-represented in previous Department for Business and Trade consultations, which means the modelling skews towards larger businesses that can absorb compliance overhead. If you employ five people in a salon, your evidence is more valuable than that of a legal firm submitting a fourteen-page position paper. Women thinking about starting up, and reading this as prospective employers rather than current ones, will find the same weighting applies to them: our overview of why women make great entrepreneurs sits alongside a research base that ministers cite but rarely see reflected in consultation responses.

The contrarian case: the reforms may protect women-led businesses too

Not every woman running a small business will lose from these reforms, and it is worth saying so out loud. Campaigners for young women in low-paid work, including the Young Women’s Trust, argue that the current system pushes wages down across whole sectors by allowing the largest employers to undercut smaller ones on flexibility. A national coffee chain that keeps two hundred baristas on zero hours contracts sets a wage floor that an independent cafe on the same high street must match. If the chain is forced to guarantee hours, the independent’s wage bill becomes comparatively lighter, not heavier.

There is also a customer-side argument. Care agencies competing for local authority contracts on price have driven down carer pay for a decade. Guaranteed hours would slow that race. Providers with a stable, contracted workforce tend to win the tenders that reward quality rather than the cheapest hourly rate. In our own conversations with women running small care businesses for this piece, several told us they welcome the floor even as they wince at the paperwork.

There is also a retention argument. Living Wage Foundation research on variable-hours workers has found that nearly six in ten receive less than a week’s notice of their shifts. Employers who have moved staff onto more predictable contracts often report better retention as a result. Recruitment is one of the largest hidden costs in hospitality and care. A regime that reduces churn may, on balance, save money for the small employer even as it costs money on the front page of the payroll report.

What the top-line proposals miss

Two blind spots in the consultation are worth flagging, because they are the ones women in business raise most often when the subject comes up.

The first is the treatment of the self-employed. A large share of women in retail, beauty and creative sectors work through their own limited companies or as sole traders, and many take on casual staff themselves. The reforms do not touch genuine self-employment, but the boundary between a worker and a contractor is where most tribunal disputes now sit. The consultation is silent on how it will interact with the ongoing employment status review. Businesses considering whether to trade as a sole trader or a limited company should keep an eye on both consultations together.

The second is funding. The reforms come with no dedicated transitional support for micro-businesses. Women running businesses that qualify for grants for women in business may find these useful for absorbing software and training costs, but there is no dedicated stream for zero hours transition. Submissions from the Federation of Small Businesses have asked government to reconsider this.

What happens after 25 August

The consultation closes at 23:59 on 25 August 2026. From that point, the Department for Business and Trade will spend the autumn analysing responses. Draft regulations are expected to follow, with a further short consultation on the drafting itself. The substantive rights are expected to commence from 2027, though the government has explicitly reserved the right to phase them. That means shift notice provisions could arrive on a different timetable to guaranteed hours rights.

Acas will publish a revised statutory Code of Practice alongside the regulations. That code will be legally admissible in tribunals, which means it, rather than the Act itself, will govern day-to-day disputes. Employers who treat the code as advisory will find employment judges treating it as binding.

For women in business, the practical upshot is this. If you employ casual staff, the twelve months from September 2026 will be the window in which to redesign contracts, upgrade rota software and cost the changes into your pricing. If you are thinking about hiring your first employee, factor these rules into the model from the start rather than retrofitting later. Our guide on setting up a business today covers the wider compliance landscape.

The bigger picture: how the reforms fit the female economy

UK women start businesses in slightly different sectors than men, and employ workforces that look different. Successive Rose Review progress reports on female entrepreneurship have found that women-led businesses are more likely to employ other women, more likely to operate in service sectors, and more likely to offer part-time and flexible roles. That combination puts them squarely in the path of the zero hours reforms.

It also makes them the natural constituency for the reforms if the government gets the detail right. A rota system that guarantees a floor of hours suits a mother returning to work as much as it suits her employer, who is often also a mother. The consultation is, in a sense, an argument within the female workforce as much as between employers and workers.

The Fawcett Society has argued in its evidence to Parliament that the informalisation of low-paid service work has held back women’s economic security for two decades. Zero hours contracts are a symptom rather than the cause, but they are the most visible symptom. A reform that trades absolute flexibility for a predictable floor would, in the Fawcett view, do more for the gender pay gap in the lower quartile than any other single labour market intervention available to the current government. That view is not universally shared, but it is not fringe.

Prowess will publish a full summary of consultation responses in September, alongside our regular briefing on regulatory change affecting women-led businesses. In the meantime, the useful frame is not whether the reforms are good or bad in principle. It is whether the version that emerges from 25 August recognises that the same woman may be an employer on Monday and a worker on Tuesday, and that the flexibility question does not have a single correct answer. For further background statistics on women’s economic contribution, our key facts page tracks the figures that underpin this debate.

The consultation itself is available on gov.uk at the Make Work Pay consultation page. Responses close at 11:59pm on 25 August 2026.

Whether you file a two-paragraph response or a full submission, the value of the consultation depends on the range of voices reaching it. On current trajectory, women running small businesses, and the largely female workforces they employ, will feel the effects of these rules more directly than almost anyone else. It follows that they should be the ones the department hears from most clearly before the door closes at the end of August. What you say will matter more than what a trade body says on your behalf, because ministers are looking specifically for evidence from small employers, and small employers are exactly what the female business economy is made of.