Retailers have warned that government plans to guarantee regular working hours for staff on zero-hours and short-hours contracts could make it harder for businesses to recruit part-time workers during peak trading periods.

Under proposals set to come into force next year, employers would be required to offer workers on zero-hours or short-hours contracts a guaranteed minimum number of hours each week, based on their regular working pattern.

The rules, which would also apply to agency workers, form part of Labour’s Employment Rights Act, which became law late last year.

In a consultation launched this week, the government said its preferred approach would see workers guaranteed a minimum of between eight and 20 hours a week if their current contract sits at or below that level.

Businesses would be expected to assess a worker’s regular hours over a 12-week reference period, although workers could still choose to remain on a zero-hours contract. Those affected would also be eligible for compensation if shifts are changed at short notice.

Business secretary Peter Kyle said the changes were designed to give workers more certainty over their income.

“It’s not right that people can work regular hours but still have no certainty about their pay from week to week,” he said.

“These vital changes will mean more certainty for millions of people and will save the lowest paid workers hundreds of pounds.

“We’re consulting because we need to get the detail right to ensure these reforms work in practice and guard against unintended consequences from this major change to the labour market.”

More than 1 million people in the UK are currently employed on zero-hours contracts, with the model widely used across hospitality, retail, warehousing and healthcare.

However, the proposals have drawn criticism from both unions and employer groups.

Usdaw general secretary Joanne Thomas said it was “deeply disappointing” that the government was not giving all workers the right to a guaranteed-hours contract.

“Many of our members are employed on short-hours contracts, routinely working significantly more hours than they are contracted,” she said.

“Those additional hours can be removed at the discretion of the employer, leaving workers without stability or security.”

Thomas added that young people, women, disabled workers and those from minority communities were disproportionately affected by zero and short-hours contracts.

TUC general secretary Paul Nowak also urged ministers not to water down the reforms, warning that workers should not be left “at the whim of a bad employer who could cut shifts last minute”.

However, retail and hospitality groups have raised concerns that the rules could reduce flexibility for employers and staff, particularly in sectors where demand fluctuates sharply.

British Retail Consortium chief executive Helen Dickinson warned that ministers “cannot afford to get this wrong”, with more than 1 million young people currently out of work or education.

“Crack down on bad employers by all means, but not by adding costs and rules that deter good employers from hiring in the first place,” she said.

The BRC said a 12-week reference period could leave retailers with little choice but to scale back part-time recruitment during busy seasonal periods such as Christmas.

It also argued that defining contracts of up to 20 hours as “low-hours” would be “disproportionate”, while requiring up to four weeks’ notice for shift changes would be “out of step with the realities of retail”.

UKHospitality chair Kate Nicholls said retaining access to zero-hours contracts remained “crucial” for the sector.

She called for a 26-week reference period, arguing it would offer “a fairer and more accurate reflection” of regular working patterns in a seasonal industry.

“There is a danger that over-regulating flexible work actually increases work instability, rather than decrease it, which would undermine the government’s agenda to get people back into work,” she said.