Mini-Budget 2020: The government has introduced a new scheme offering to pay 100% of the wages of employees aged 16-24, if an organisation chooses to hire them on a six-month job placement.
Employers can claim back the cost of the national minimum wage of £6.45 for employees aged between 18 and 20 year and £8.20 for 21 to 24-year-olds through the government’s Kickstart job scheme, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions.
To be eligible, employers are expected to offer contracts of a minimum of 25 hours per week.
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The government will also fund employers who provide trainees with work experience training at the rate of £1,000 per employee, and give businesses £2,000 for every employee that it hires under 25 and £1,500 for every employee that it hires aged 25 and over, from 1 August 2020 until 31 January 2021.
These new schemes will be in addition to the existing £1,000 payment that the government already provides for 16 to 18-year-old apprentices and those aged under 25 with an education, health and care plan.
Peter Cheese, chief executive at Chartered Institute of Personnel and Development (CIPD) said: “The £2 billion Kickstart fund is a bold measure to help get young people into work but employer engagement will prove critical. Similar schemes in the past have floundered as employer pick up was low or largely limited to low-paid opportunities in the public or charitable sectors. This scheme may face similar difficulties if it fails to engage with the private sector, especially at a local level.”
“The government will need to draw on local partnerships and networks to make it work for young people and small employers in particular.
“Efforts to incentivise employers to invest in new apprenticeships are welcome. However, to ensure the best use of public funds we believe that these should have been more tightly focused and more generous: aimed at boosting apprenticeship take-up among SMEs, where uptake has historically been low, and focused on opportunities for young people.”