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As part of last night’s Budget, the Federal Government has announced a new Youth Jobs PaTH program (PaTH standing for Prepare, Trial, Hire), targeting vulnerable youths under 25 looking to participate in internships and receive on the job training.

Commencing 1 April 2017, the $751.7 million package will allow young job seekers to receive not only intensive pre-employment skills training, but also $200 per fortnight on top of their regular income support payment while participating in the internship. Businesses will also benefit, receiving an upfront payment of $1000. The budget papers say that the initiative will “help up to 120,000 young people over four years ­secure jobs”.

Will the initiative help vulnerable youths find employment, or open a door for unscrupulous employers to exploit the scheme and interns themselves?

Youth Jobs PaTH Program

The Youth Jobs PaTH program will take the most vulnerable jobseekers aged under 25 and move them into employment under three stages.

  1. Jobseekers are placed in pre-employment skills training in an intensive program for up to six weeks. The first three weeks of training will be basic employability skills (including presentation and IT skills), followed by another three weeks of advanced job preparation
  2. In the first year, 4 to 12 week paid internships will be offered to 30,000 jobseekers. Interns will work 15 to 25 hours a week. Interns will be given an extra $200 per fortnight in additional income support payments. Businesses will be given $1,000 upfront per intern
  3. Wage subsidies will be offered to businesses who place under 25s who have been out of work for more than six months, from $6,500 to $10,000 if the job seeker is classified as having barriers to employment. This payment will encourage businesses to hire young people but bosses will still get $6,500 to bring those who need less help on board

Enrolments in the Youth Jobs PaTH program will be sourced through employment and welfare services, and participation will be voluntary.

Ideas Boom

In addition to the PaTH program, the government will also be investing $88.6 million to the New Enterprise Incentive Scheme, to promote entrepreneurship and self-employment.

The Government will establish new ‘Exploring Being My Own Boss’ workshops to engage job seekers to explore self-employment.

To help young people to develop their innovative ideas into successful businesses, Self-Employment Starter Packs will also be introduced. These will contain information on the services available to support job seekers to establish a business.

Finally, Inclusive Entrepreneurship Facilitators will be appointed in selected locations with high youth unemployment. Facilitators will help bring together available services and programmes (such as jobactive, NEIS, microfinance services, and start-up incubators)

The funding, to be delivered over four years, will include workshops about self-employment and education around government assistance available to such entrepreneurs. Up to 8,600 young people will be able to access the program each year.

This scheme will align well with the Federal Government’s National Innovation and Science Agenda. In addition to the IT upskilling provided by the PaTH pre-employment training, the New Enterprise Incentive Scheme will boost talent and skills much needed as a foundation for the government’s innovation statement.

Exploitation of Interns

Young workers are normally inexperienced and potentially vulnerable to exploitation. Following the extensive corruption faced in the vocational education and training sector, there seem to be no additional mechanisms in place under the PaTH program to prevent employers exploiting the program. It is no surprise that unpaid internships in Australia have been recently on the rise, particularly in the startup community, as a result of many unemployed youths (including graduates) looking to boost their chances of securing a job through work experience.

At $200 per fortnight per jobseeker for 15 to 25 hours per week, this equates to just $4 an hour (on top of any existing welfare payment). The program provides a legal avenue for businesses to take on unpaid interns, not pay minimum wage, and receive $1,000 upfront per intern. As the program rolls out, it will be interesting to note how many interns are kept on-board as paid employees, or whether employers will have a revolving door of unpaid interns working for them.

Currently under the Fair Work Act 2009 (Cth), some unpaid work arrangements are lawful and others are not. For example, an unpaid internship may be lawful if it involves a vocational placement. The legislation exists to protect the exploitation of unpaid interns and they should benefit more out of the relationship than the employer (through upskilling, and experience).

Stage two and three of the PaTH program now sees employers receiving plenty of benefits, including upfront payments, free labour and no commitment to provide the jobseeker with any skills or job afterwards. This shift is a substantial benefit for businesses and may put potential jobseekers at risk of being taken advantage of.

***

While the PaTH program is a step in the right direction with addressing with generational unemployment on paper, more safeguards will need to be put in place to protect vulnerable interns.

What do you think? Tag us on Twitter @legalvision_au and let us know.

 

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