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Zero hours contract workers earn £1,000 less than others in same job, study says

Workers on zero hours contracts earn £1,000 a year less than other employees doing the same job, a new study reveals.

The Resolution Foundation said people on the controversial contracts, under which they don't know if they have work from one week to the next, face a "precarious pay penalty".

The difference is around 6.6%, or 93p an hour, but those in the lowest paying jobs receive 9.5% less, research by the think-tank found.

Agency workers and those in temporary jobs also receive less than those in similar employment, said the foundation, adding that wages are being held down because of the widespread use of zero hours contracts.

Laura Gardiner, Senior Policy Analyst at the Resolution Foundation, said: "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.

"While some people value the flexibility offered by zero hours contracts, they also carry a significant precarious pay penalty that can cost workers around £1,000 a year. That's a big price to pay for work that too often lacks the security workers desire.

"As new ways of working continue to grow - from ZHCs and agency work to the gig economy and wider self-employment - we need a better understanding of how they help or hinder people's earnings and career prospects.

"Policy makers must also tread a careful path between getting to grips with the living standards challenges thrown up by new and often insecure forms of employment, without jeopardising Britain's recent job-creating success."

TUC general secretary Frances O'Grady commented: "Zero hours workers suffer the double whammy of lower pay and fewer rights at work.

"Far too many workers have no power to stand up to bad bosses."

A Business Department spokesman said: "As the Prime Minister has made clear, we are determined to build an economy that works for everyone and to help working people who are struggling to get by.

"All workers, whether they are temporary or on a zero hours contract, are entitled to receive at least the national minimum wage, and the national living wage for those aged 25 or over."

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