Are you thinking of employing an apprentice? Find out the facts with our guide for employers
Employing an apprentice in the right role can create a win-win situation for the business and for the apprentice. The business gains fresh new talent and energy at a reasonable cost, whilst the apprentice gains confidence, skills and experience.
Currently, the government in England is advocating the value of apprenticeships and will be launching an ‘Institute for Apprenticeships’ in April 2017 when changes to the way apprenticeships are funded will be introduced. They have also set a target of three million apprenticeship new starters by 2020.
How to go about employing an apprentice
Employers can register their interest in employing an apprentice with the National Apprenticeship Service (NAS). They support, fund and co-ordinate the delivery of apprenticeships throughout England. They can also advertise vacancies.
Once you have selected your apprentice, you will need to engage with them on making either an ‘apprenticeship agreement’ or an ‘apprenticeship contract’. The different agreements give the apprentice different rights, so it’s important that employers understand these differences and that the most appropriate one is drafted.
Many industries provide a ‘framework’ for training for most job roles. The NAS will guide you to the right industry body which can assist with your apprentice’s training, qualification and assessment.
Your commitment as an employer
The word ‘apprentice’ means that an employer is legally obliged to provide training. Employers need to commit to providing a high standard of on the job skills whilst providing a strong training plan. You’ll need to allow them time to fit in their study time or take exams, within reasonable limits. As they progress, their wages and training plan should be adapted accordingly. Employers must:
- Pay the apprentice for time spent training or studying for a relevant qualification, whether at work, college or a training organisation.
- Offer apprentices the same conditions as other employees working at similar grades or in similar roles. This includes paid holidays, sick pay, any benefits and other support.
You have no legal obligation to provide a job once an apprentice’s contract has ended, unless you have promised one within the agreement.
An apprentice’s commitment to your business
An apprentice employed under an ‘apprentice agreement’ has to commit to normal terms of employment, like any other employee. However, an ‘apprentice contract’ ensures the apprentice will have greater employment protection than an apprentice employed under an ‘apprentice agreement’ or another employee.
Pitfalls of Apprenticeships
As with employing any member of staff there can be risks involved. An ‘apprenticeship contract’ is a fixed term contract with some being up to five years in duration. There is very limited scope for early termination and most apprenticeship commitments can’t be easily withdrawn because you have a contract to train them. For example if a business gets into financial difficulty and needs to make redundancies.
If an employer breaches the contract, an apprentice could claim for loss of earnings which will be assessed over the remaining term of the agreement. They could also claim for further damages for the lost opportunity to qualify into their chosen career. This could be ten times the cost of an unfair dismissal claim.
An employer should seek legal advice before employing an apprentice as well as before ending the apprenticeship early for any reason. Employers may also face an increase in their Employers Liability contributions, as many companies are required to inform their insurers when they recruit an apprentice.
The Apprenticeship Levy: commences April 2017
From April 2017, employers with a payroll of more than £3 million, will be required to make a payment of 0.5% of their payroll bill to the apprenticeship levy through PAYE. For every £1 paid in levy payments, employers will be given an additional 10 pence by the government.
The employer can spend this cash on accredited apprenticeship programmes, training and assessment within an 18 month period. The money cannot be used for additional expenses, overheads and wages.
Each employer will be able to access their levy funds through the Digital Apprenticeship Service (DAS). Registration for an employer’s ‘digital account’ is expected to open in early 2017.
For organisations with a payroll of under £3 million, the government will continue to make a contribution towards apprenticeships for organisations using a system of co-investment. Separate measures will be in place for Scotland, Wales and Northern Ireland.
You can also read more about the apprenticeship levy in our previous guide: “Your guide to the apprenticeship levy.”