What is a temporary reduced hours agreement?
When work dries up for a while — a key customer pauses orders, a site closes for refurbishment, a slow season hits — a temporary reduction in hours can protect jobs that might otherwise be lost. But cutting hours and pay is a change to the employment contract, and in many places it can only be done with the employee's agreement or under specific rules. Getting that agreement in writing, with clear limits, matters.
This agreement explains the business reason, sets a fixed Reduced Hours Period with a start and end date, and records the normal and reduced hours and working pattern. Pay is either a stated reduced amount or reduced in proportion to the hours, never below the applicable minimum wage, and you can name a government short-time or work-sharing programme if you're using one. The agreement confirms continuous employment is not affected and that, where the law says notice or severance pay must be based on normal pay, the company will follow the law. At the end of the period, normal hours and pay return automatically; you can bring them back earlier with notice, and an extension needs the employee's written agreement.
- Best for
- Short-term hour cuts to get through a temporary drop in work
- Signed by
- The employer and the employee, initialled on every page
- Ends
- Automatically on the end date — extensions need the employee's written agreement
- Length
- About 2 pages
When to Use a temporary reduced hours agreement
- A manufacturer cuts to a three-day week while a major customer pauses production
- A restaurant reduces hours during an off-season or a refurbishment
- A small business uses a government work-sharing programme instead of layoffs
- An agency reduces hours for a team while a large contract is re-tendered
What You Fill In
20 blanks, then the name and email of each person who signs: employer, employee.
1 The parties
- Date of the agreement*
- Employer (company name)*
- Employer address
- Employee's full name*
- Job title
2 The reduction
- Reason for the reduction*
- Reduced hours start*
- Reduced hours end (last day)*
- Normal hours*
- Reduced hours*
- Working pattern during the reduction
3 Pay and benefits
- Currency
- Normal pay (gross)
- Pay during the reduction (gross)
- Pay per year · month · week · hour
- Benefits during the reduction
- Government support programme (if any)
4 Ending the reduction
- Notice to bring full hours back early (days)*
- Review date
- Governing law*
5 Who signs
- Employer signature and date, job title, initials on every page · Someone authorised to agree changes to pay
- Employee signature and date, initials on every page · Signs to give written consent to the temporary change
What the temporary reduced hours agreement Covers
- Why hours are being reduced
- The Reduced Hours Period
- Pay
- Benefits, holiday and service
- Returning to normal hours
- Other work
- Everything else stays the same
- General
Using the temporary reduced hours agreement, step by step
1 Explain the reason
Describe the business reason in plain words. The agreement records that you explained it and that the employee could ask questions and take advice.
2 Set the period and hours
Enter the start and last day, normal hours, reduced hours and, optionally, the working pattern during the reduction. Check local law — some places limit how long hours can be reduced or require notice or consultation first.
3 Set pay and benefits
Enter the normal and reduced pay, or leave the reduced pay empty to say it reduces in proportion to hours. Describe any benefits that continue at the full level, and name a government programme if you're using one.
4 Agree how it ends, and send
Set the notice for bringing full hours back early, an optional review date and the governing law. Both sides sign and initial each page.
Tips Before You Send It
- Talk to each affected employee before sending the agreement, and give them time to consider it — consent should be genuine.
- Where many employees are affected, check whether collective consultation or notice rules apply.
- If you use a government short-time or work-sharing programme, follow its rules exactly; they may set the pay, hours and paperwork.
- Keep the period short and review it. The agreement ends on its own on the end date, which protects both sides.
Sign It Online In Minutes
- Fill in the blanks. Names, dates and amounts go straight into the agreement — the preview shows exactly where.
- Name who signs. Tick “This is me” for your own part. VergeHR builds the PDF with every signature, date and initials box on the right line, and you can check or move anything before sending.
- Send it. Each signer gets a secure link and signs from any device — no account needed. The signed PDF, with an audit trail and a Certificate of Completion, is filed in Files and emailed to everyone.
Temporary reduced hours agreement: frequently asked questions
Can an employer reduce hours and pay without agreement?
In many places, not unless the contract or the law allows it — which is why this agreement records the employee's voluntary written consent. Rules differ widely, so check local law before relying on it.
What happens at the end of the reduced hours period?
The employee returns to normal hours and pay automatically, without further notice. The company can bring full hours back earlier with the notice you set, and the employee can ask to return earlier at any time.
Does reduced pay affect notice or severance pay?
It can, depending on where you are. The agreement says that where the law requires such payments to be calculated on normal rather than reduced pay, the company will follow the law.
Is an electronic signature valid for this agreement?
Generally, yes. Electronic signatures are widely accepted for employment agreements in the US (ESIGN Act and UETA), the UK, the EU (eIDAS) and Canada, and VergeHR's audit trail shows when the employee consented.