Autumn Statement 2013: The government is to abolish employer national insurance contributions (NICs) for under-21s earning under £813 a week.
From 6 April 2015, employers will no longer be required to pay the contributions.
Chancellor George Osborne announced in the Autumn Statement that the reform will make it cheaper for organisations to employ younger staff.
It will apply to both existing and new employees and individuals’ state pension will not be affected.
The abolition will save an employer more than £500 for every under-21 earning £12,000 and £1,000 for those earning £16,000.
Nearly 1.5 million under 21-year-olds will be lifted out of employer national insurance contributions as a result, with average savings of £355 per employee.
Gareth Stevens, head of employment law at QualitySolicitors Clapham and Collinge, said: “Removing national insurance contributions for employees under the age of 21 will likely lead to a surge in employment tribunal claims under the age discrimination banner.
“The government needs to be explicit about how this measure will work in practice. Although it is intended to combat youth unemployment, employers are not legally allowed to enquire about an applicants’ age at any point during the recruitment process, which begs the question of how it will be effective within the remit of the law?”