When hiring staff, employers are not supposed to discriminate against older people or women of child-bearing age. However, such people are likely to cost the employer more than similarly-qualified people not in these categories, because of the increased likelihood of time off due to illness and pregancy. Even though SMEs do not have to pay the cost of maternity pay themselves, the disruption and cost to the business of hiring temporary cover for staff on maternity leave is high. My proposal is that rather than just making discrimination on grounds of age or sex illegal, the government should go further by removing the incentive to discriminate.
The implementation of age/sex-related NI contributions would be simple for employers who use payroll software. SME's with up to (say) 10 staff could be given the option to use the existing flat-rate system, if it is deemed too expensive for them to implement variable employer NI.