Companies get £2500 to employ Jobseekers

The Government has announced a scheme that will give businesses of any size up to a £2,500 grant to employ unemployed persons who have been claiming Jobseekers Allowance for over 6 months.  This will relieve the businesses in the current economic climate and give Jobseekers a break – in fact it is a better idea then New Deal full stop.

However, … it is only an idea that hasn’t been fully thought through. Any company which has employed someone claiming Jobseekers Allowance will get £500 for employing someone and another £500 if they are still in the job for over 6 months. Up to £1,500 allowance for training is also included in the deal… so what is the problem?

Recruitment Concerns

There are many ways of increasing the chance of employing someone who has been claiming Jobseekers Allowance, a couple of suggestions is advertising job positions at the Jobcentre (website, job points etc.) and vetting applications forms highlighting and presuming that gaps in employment history is a point of unemployment – and assuming that unemployed person was claiming  Jobseekers Allowance.

The problem with this system is that at some point before the Jobseekers is employed, the Employer has to ask if the person has been claiming Jobseekers Allowance, this will probably happen at an interview.

The concern is (and I know you are reading this and shouting it out!) it is illegal to request such information.

You are not allowed to ask questions such as “Are you planning to start a family soon?“, “How old are you?“, “What race are you?“, “What political party do you support?” and “Are you in receipt of any benefits?“. I know employers get away with discrimination all the time at the recruitment stage however no legit business asks such questions (they just request them as a mandatory Equal Opportunities/Recruitment Monitoring form).

Jobseekers’ have to have a Recruitment Voucher signed by the Jobseeker for them to take advantage of the offer.

The “scam” Loop

The terms of this Grant enables recruitment agencies to claim. The position of employment is “expected” to last at least 6 months therefore regardless if someone is dismissed in probationary period the employer is entitled to the £500 grant per person, therefore the job has to be advertised as a permanent position or for a term of 6 months or more regardless if the person even lasts just one week.

It must have an average minimum hours of 16 hours per week. This means any clever scammer can plan a predicted 12 month contract even though has no intention of honouring it where the hours may be as little as 4 hours a week first few weeks then increasing to 40 hours towards the end of the 12 months. So what if the ex-Jobseeker only done 4 weeks at 4 hours a week with an actual average minimum hours a week of 4?

The employer is “expected” (why don’t they say “must” as it is the law?) to comply with the National Minimum Wage. Employee must have a job contract. Employer must pay the employee wages. Not to be used with any other Government offers. Subject to available funding.

You just know the Government are clowns when #2 of the Terms states:

The job must be a genuine vacancy and employers must not dismiss existing employees in order to claim the subsidy.

Considering they have had to been receiving Jobseekers Allowance for 6 months I doubt this will happen. Actually, ironically the Terms doesn’t mention anything about the person having to have claimed Jobseekers and doesn’t state any period of time… So if any fraud happens at Jobcentre this is why: totally left open to abuse!

Flexible New Deal

I was thinking… why are they offering this scheme? The Government has promised to guarantee every 18-24 year old Jobseeker a job or “training” if they have been out of work for 12 months.  You may have recalled me saying that the Flexible New Deal can be fast tracked after 6 months instead of the normal 12 months. Is it a coincidence? I think not!

For example, the £1,500 training allowance per a Jobseeker is available to be used at one of their “partners” (In other words: Prime Contractor, (Sub-contractor), training provider etc.).

Basically this scheme (seems to me anyway) is a wrapper to get work placements for those on the Flexible New Deal scheme and is open to abuse.

You can’t reclaim £1,500 to get in house training or to order courses and qualifications to whom you choose – it is explicitly available to what is offered by their partners (Flexible New Deal contractors are their partners).

How are you going to complete a Recruitment Voucher when you have been offered employment and signed off? These vouchers you sign at the Jobcentre. If you are signed off, why would you attend an appointment there solely to sign a  piece of paper to bag your employer £2,500? – there is nothing in it for you!

Flexible New Deal prime contractors and their sub contractors CAN even claim for this £2,500 in addition to what they get on their contract anyway there are no restrictions and you couldn’t refuse to sign that voucher without getting your benefit stopped anyway.

But dont worry, they wont employ you… they will rather force you into community service for free!

The idea is to get more employers interested in the scheme of free labour and an incentive to actually get people into jobs at the end of the “intensive” course to reduce the current high numbers of people reattending the courses.