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New law: Employers plan how to benefit from Chancellor’s new 'kickstart' scheme

Employers are considering whether they can fairly and lawfully reshape the age profile of their workforces to benefit from new kickstart incentives announced in the chancellor’s recent budget by taking on younger employees, trainees and apprentices, particularly if they plan to make existing workers redundant as a result of COVID-19.

Legal Alert August 2020

This update was published in Legal Alert - August 2020

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

Under the scheme, the Chancellor will make a fund of £2bn available to create high-quality work placements for 16 to 24 year olds who are on Universal Credit and deemed at risk of long-term unemployment.

Employers will be able to claim the following for six months, for each new employee in the relevant age range:

  • An amount equal to 100 per cent of the relevant National Minimum Wage for 25 hours per week.
  • Associated employer National Insurance contributions.
  • Associated employer minimum automatic enrolment pension contributions.

Employers who take on new trainees and apprentices in that age band can claim £1,000 per new trainee (up to a maximum of 10 trainees) and £2,000 per new apprentice taken on from 1 August 2020 to 31 January 2021.

The government will also pay a new £1,500 bonus per apprentice for employers taking on apprentices who are over 25.

Employers planning to take on younger workers to take advantage of the scheme should, however, take care not to inadvertently infringe direct and indirect age discrimination laws.

Operative date

  • Now

Recommendation

  • Employers should consider whether they can fairly and lawfully reshape the age profile of their workforces to benefit from the new ‘kickstart’ incentives, particularly if they plan to make existing workers redundant as a result of COVID-19.

Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.

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