Apprenticeship Scheme – the lowdown

Many UK businesses will find that skills shortages and recruitment difficulties are a big problem, especially in light of brexit. Apprenticeships can be an answer as they combine working with studying that leads to nationally recognised qualifications.

Apprenticeship schemes can ensure companies have the right practical skills and qualifications in their workforce and ensure the company keeps up to date with the latest technology and practices.

Apprentices must learn the job and specific skills, work with experienced staff, and study during their working week (college or a training organisation).

What is an apprentice?

Apprentices are full employees employed on an apprenticeship training agreement, which is a contract of service, so the apprentice undertakes to work for the employer and is treated as a normal employee. 

The apprentice is either employed directly by the employer under an Apprenticeship Agreement, or the apprentice will come via an Apprenticeship Training Agency (ATA), who employs the apprentice directly. The employer would pay the ATA a fee for the apprentice in this scenario. There is a national register which you can view here.

To start an apprenticeship, an individual needs to be aged 16 or over (by the end of the summer holidays) and cannot be in full-time education.

For further help, you can contact The National Apprenticeship Service by email, [email protected], or by telephone on 0800 015 0400.

Apprenticeship law

If you’re thinking of hiring an apprentice, there are certain obligations you and your apprentice will need to meet before you can take them on:

  • The National Minimum Wage for apprentices is currently £3.90 per hour. However, many employers pay more. This minimum wage applies to all apprentices aged under 19 and apprentices aged 19 or over in the first year of their apprenticeship. It must be paid for all the time the apprentice spends working or training (that is part of the apprenticeship). After this, the apprentice must be paid the normal National Minimum Wage for their age
  • Apprentices must be offered employment for at least 30 hours per week (including off-the-job training time), except in some circumstances where the learner can’t complete the full 30 hours (for example if they have caring responsibilities or are disabled)
  • Off-the-job training should be at least 20% of their working hours
  • Apprentices are fully covered by the Working Time Regulations (so that they are entitled to normal holiday and rest breaks, as employees are) and the Equality Act 2010
  • Depending on the role, an apprenticeship contract will be for a fixed period of time that is needed to acquire the skills and qualifications for the job. This can take anything between one and five years (one year is the minimum).
  • Apprentices have the same dismissal rights, and can be dismissed for the same reasons, as other normal employees. If an apprentice’s employment isn’t renewed when their training ends, they will be treated as having been dismissed. The apprentice will be entitled to receive a written reason for dismissal and the ACAS Dismissal Code will apply (as for all employees). There’s no need to provide a notice period of dismissal because they were employed on a Fixed Term contract
  • There is no legal requirement to provide employment at the end of the apprenticeship but an employer may agree to do this; there’s no duty on the employer to redeploy the apprentice into suitable alternative employment
  • Employers may legitimately ask for an apprentice to repay the employer for all or part of the employers expenditure on training if the apprentice leaves the organisation before the end of the apprenticeship, where this forms part of the original agreement. 

Hiring an apprentice

In order to complete an English apprenticeship under an apprentice agreement, an apprentice must meet the standard completion conditions (or the alternative completion conditions, which we have not covered here). The standard conditions require an apprentice to have entered into an apprentice agreement relating to a recognised apprenticeship framework.

They must also have completed a course of training for the qualifications identified by the framework and met all the requirements specified in the apprenticeship framework to be awarded the apprenticeship certificate.

A framework is a document that’s used by colleges, employers and training providers to make sure apprenticeships programmes are delivered consistently and includes the name of all qualifications, and how long the apprenticeship will take.

The details on how to hire an apprentice are available here, including:

  • Choosing an apprenticeship framework or standard for an apprenticeship in your industry
  • Finding an organisation that offers training for the apprenticeship framework or standard
  • Checking what funding is available
  • Advertising your apprenticeship
  • Selecting your apprentice and making an apprenticeship agreement and commitment standard with them.

Apprenticeship levels

There are four levels of apprenticeship available:

  • Intermediate Level 2 Apprenticeships (equivalent to five good GCSE passes)
  • Advanced Level 3 Apprenticeships (equivalent to two A level passes)
  • Higher Apprenticeships 4, 5 and 6 and 7 (foundation degree level and above).

Degree Apprenticeships, levels 7 and 7 (Bachelor’s or Masters degree level). More details are available from the Education and Skills Funding Agency (ESFA) website here.

Apprenticeship funding

Apprenticeship funding is available for employers from the government. The size of the funding you will receive varies depending on whether you pay the apprenticeship levy or not. Prior to 1st April 2019, non-levy paying companies had to pay 10% of the cost of training and assessing each apprentice.

However, from 1st April 2019, this was reduced to 5% of the cost. The government funds the remaining 95%. Companies need to agree on a payment schedule with a training organisation and pay them directly. Companies may be eligible for extra funding depending on their and the apprentice’s circumstances – you can read more here.

Apprenticeship levy

The apprenticeship levy was introduced on 6th April 2017 and requires employers with pay bills of more than £3million to pay 0.5% of their annual pay bill to the levy fund. A levy allowance of £15,000 pa can be offset against the levy.

The levy charge is paid through the PAYE process to HMRC and it must be paid by all companies, with pay bills of more than £3million, even if they do NOT employ apprentices.

Once the levy has been paid employers can access funding for apprenticeships through an online account. However, the funds expire after 24 months if they have not been spent by the employer.

The fund must be spent on apprenticeship training using approved providers. The government adds a 10% top-up to the employer’s fund.

What next?

BHR can help ensure you have the right agreements and policies in place when you are taking on an apprentice. Contact us today for more information. 

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