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The EU Employment Directive, aimed at eliminating age discrimination, will be brought into force by the UK government on 1 October 2006. Under sections that cover indirect discrimination, recruitment drives at colleges and universities, also known as "milk rounds", could become illegal.
Indirect discrimination is described as where the requirements, conditions or practices imposed by an employer have a disproportionately adverse impact on one group or another.
Ann Swain, chief executive at Atsco, said, "A lot of blue-chip companies rely on recruiting young graduates to meet a proportion of their annual staff intake. If the milk round is abolished and alternative recruitment strategies are not in place, employers could face problems getting the staff they need."
Employers could also face a sharp rise in recruitment costs if milk rounds are abolished as they provide a cheap way for companies to recruit graduate staff.
Atsco said IT departments in particular would have to tread carefully when the new law takes effect, as some elements of the industry have a reputation for preferring candidates in their twenties and thirties, at the expense of equally qualified older applicants.