The Kickstart Scheme has launched
On 23 August 2021, the Kickstart scheme was launched, which allow employers to bid for funding to create new employment opportunities for 16-24-year-olds. This article shall focus on the implications of the scheme on Employers.
What is the Kickstart Scheme?
Under the Kickstart scheme, the DWP and Grant Recipients (the Employer) enter into a legally binding agreement through which the Employer receives a grant to employ a Participant (an Employee), who gains six months of employment.
The scheme provides new employment opportunities for young people, aged 16 – 24, at risk of long-term unemployment who are registered at job centres in areas determined by the DWP.
The Employer receives a sum per Employee to use for funded activities, which they may request once employment has commenced.
What will Employers get and what do they need to provide?
Employers get £1,500 funding per job, which should be spent on setup costs and supporting the participant to develop their employability skills.
So, as an employer you will need to provide them with training and employability support, IT equipment and support as well as a uniform or personal protective equipment, if applicable.
DWP may ask you for your records to show that you have spent the funding on setup costs and supporting their employability.
What are the Kickstart Scheme wages and other costs?
The funding covers:
- 100% of the national minimum wage or national living wage for 25 hours per week for a total of 6 months.
- Associated National Insurance contribution and minimum automatic pension auto-enrolment contributions.
Terms of the grant
The grant covers the national minimum wage for 25 hours per week for “new” jobs; however, the employer may choose to pay more.
In order to be eligible for the grant, the Employer must ensure that the job advertised or funded under the grant are not part of another Kickstart scheme grant agreement or application. Should the DWP suspect that the Employer has dishonestly and intentionally obtained duplicate funding, they may refer the matter to the police.
The grant is a contribution only, the employer is responsible for sourcing or providing the resources required for the funded activities and they shall not be reimbursed if they overspend.
The DWP reserve the right at its entire discretion to vary the terms and conditions of the grant agreement for any reason and may suspend payment or terminate the agreement where it is unable or not permitted to provide the funds.
Further, the DWP have no liability to the Employer for any losses caused by a delay in the payment of the grant, howsoever arising.
What do employers need to be aware of?
By joining the Kickstart scheme employers must not forget their usual obligations and risks associated with hiring a new employee such as:
- Kickstart participants will be employees, therefore they would be entitled to the usual employee benefits (annual leave, holiday and sick pay)
- Kickstart participants will have the same protections as a usual employee, such as not be unfairly dismissed (although unfair dismissal claim, requires employees to have 2 years of continuous service, they may still be entitled to bring automatic unfair dismissal claims)
- Discrimination law still applies – so they would still be able to bring claims for discrimination against the Employer, despite being employed for 6 months.
An employer should familiarise themselves with the Kickstart Scheme Grant Funding Agreement: terms and conditions for employers – effective from 23 August 2021 – GOV.UK (www.gov.uk) before joining the scheme.
The Kickstart scheme has benefits however, it is not without risks.
If you would like to speak to an expert employment lawyer in relation to the Kickstart scheme or any other employment or HR related matter, please contact us via email at firstname.lastname@example.org or telephone on 02079036888.
The material contained on this website contains general information only and does not constitute legal or other professional advice and should not be relied upon as such. While every care has been taken in the preparation of the information on this site, readers are advised to seek specific legal advice in relation to any decision or course of action.