Taking On An Apprentice – The Full Details

We often find apprenticeship schemes in the news, but sometimes they are not always there for good reasons. Here, we are going to look at what they are and learn more details about them.

Most UK businesses are having problems with recruiting processes and skills shortages. Perhaps the best solution to this problem is apprenticeships. This is because the apprentice is working while studying which can result in well-recognised qualifications.

With apprenticeship schemes, companies can guarantee that they have the proper practical skills and qualifications needed in their workforce and assure that the company is always updated with the current technology and practices.

Apprentices are expected to learn about the job and certain skills as well as work with experienced staff and at the same time, study for the whole working week either in a training organisation or in a university.

These apprentices are likely more loyal to the organisation who have invested in them. At the same time, they tend to be more motivated since they have chosen to learn about a certain job at work.

What Is An Apprentice?

Apprentices are working as full-time employees under the apprenticeship agreement, otherwise known as the contract of service, wherein the apprentice will work for the company and will be considered as a regular employee. The agreement should be done in a designated form starting from April 6, 2012, upon the implementation of the Apprenticeships, Skills, Children & Learning Act 2009.

These apprentices could either be directly employed by the employer based on the Apprenticeship Agreement or they are introduced through the Apprenticeship Training Agency (ATA), who directly hires apprentices. The employer will be responsible for paying the ATA, which is the fee for the apprentice in this situation. There is also a national registration for ATA’s.

Apprenticeship schemes can also be used by employers in training both new and existing staff, also funding can be availed from the government in training these apprentices.

Individuals who can qualify for apprenticeships are those who are aged 16 or above when the summer holidays end. Furthermore, they should not be in full-time education.

For further details, you can get in touch with The National Apprenticeship Service by phone, just call them on 0800 015 0400. You can also send your inquiries to their email address which is nationalhelpdesk@findanapprenticeship.service.go.uk.

Apprenticeship Law

If you are planning to hire an apprentice, then there are a few responsibilities that you and your  apprentice must meet before you can start taking them in:

• Starting on April 1, 2020, apprentices must receive £4.15 per hour since this is the National Minimum Wage. Fortunately, there are several employees who are willing to pay more. This minimum wage is applicable to all apprentices aged 19, below 19, and over 19 during the first year of their apprenticeship. This amount should be paid to the apprentice throughout the time that they were training as part of their apprenticeship or working in the company. When the term is over, the apprentice will receive the regular National Minimum Wage appropriate for their age.
• Apprentices should be provided with employment for at least 30 hours per week. Take note that this includes off-the-job training time. However, there are some exceptions, for instance, if the learner is unable to complete the entire 30 hours due to certain circumstances such as being disabled or having caring responsibilities.
• Off-the-job training should comprise at least 20% of their working hours.
• The Working Time Regulations and the Equality Act 2010 provide full coverage to these apprentices. This means that they are allowed to enjoy rest breaks and normal holidays, just like regular employees.
• Depending on their positions, most often an apprenticeship contract is set for a fixed period of time which is required in acquiring the skills and qualifications needed for the job. This could probably take between one and five years and the minimum is one year.
• Apprentices have similar dismissal rights. This means that they can be dismissed for the same reasons as other regular employees. In case the apprentice’s employment is not renewed once the training has ended, then they can be considered as being dismissed. Moreover, the apprentice should be provided with the reason for dismissal in printed form. The ACAS Dismissal Code will also be applied to them just like any other employees. Although, it is not required that you should provide them with a notice period of dismissal since they were hired based on a Fixed Term Contract.
• It is not legally required that the employer should provide them with employment once their apprenticeship has ended, however, the employer could consent to this. Additionally, it is not the responsibility of the employer to redeploy the apprentice into any appropriate alternative employment.
• Employers can legally ask the apprentice for repayment of all or part of the employers’ expenses on training in case the apprentice decides to leave the company before the apprenticeship ends. This is applicable if the training is considered as part of the original agreement.

Hiring An Apprentice

In order to accomplish an English apprenticeship as part of the apprentice agreement, the apprentice must be able to satisfy the standard completion conditions or the alternate completion conditions. The standard conditions will require the apprentice to get involved in an apprentice agreement which is associated with a recognised apprenticeship framework.

It is also required that they should have accomplished a course of training for the requirements recognised by the framework and met all the conditions defined in the apprenticeship framework so they can be given the apprenticeship certificate.

A framework refers to the document being used by employers, colleges, and training providers in ensuring that the apprenticeships programmes are accomplished in a consistent way. It also incorporates the name of all qualifications as well as the period the apprenticeship will take.

The following are needed if you want to hire an apprentice:

• Select an apprenticeship framework or standard fit for an apprenticeship in your specific industry.
• Look for a company that provides training for the apprenticeship framework or standard.
• Verify what funding is currently available.
• Advertise your apprenticeship.
• Choose your preferred apprentice and make an apprenticeship agreement and loyalty standard with them.

Apprenticeship Levels

Apprenticeship has four levels. These are the Intermediate Level 2 Apprenticeships, which is just the same as five good GCSE passes, the Advanced Level 3 Apprenticeships, which is also the same as two A level passes, the Higher Apprenticeships 4, 5, 6 and 7, which are also considered as the foundation degree level and above, and finally, Degree Apprenticeships, levels 7 and 7 are equivalent to Bachelors or Masters degree level.

If you need more details on this, then you can visit the website of the Education and Skills Funding Agency (ESFA).

Apprenticeship Vacancies

In England, apprenticeship vacancies can be found on the EFSA website. However, there are also apprenticeships and vacancies that are available for employers and individuals in Scotland, in Wales and Northern Ireland.

Apprenticeship Funding

The government provides apprenticeship funding for employers. However, the extent of the funding that the employer receives differs depending on whether the organisation pays the apprenticeship levy or not. Prior to April 1, 2019, non-levy paying employers are required to pay 10% of the cost of training and evaluating each apprentice.

Nevertheless, starting April 1, 2019, the payment was reduced to 5% of the cost. The remaining 95% will be funded by the government. Companies have to make an agreement with the training organisation with regards to the payment schedule and the companies should pay them directly. Companies may also avail some extra funding, however, this will likely depend on the employer’s and the apprentice’s circumstances.

In August 2020, the government declared that they will be giving incentive payments to those companies that hire new apprentice between August 1, 2020, and January 31, 2021. For more information about this, you can visit gov.uk.

Apprenticeship Levy

It was on April 6, 2017, when the apprenticeship levy was first introduced. Basically, it requires employers to pay the levy fund an amount equivalent to 0.5% of their yearly pay bill if ever their pay bills have reached to more than £3million. However, employers can use their levy allowance in the amount of £15,000 per year to compensate for the levy.

The levy is paid to HMRC using the PAYE process. Additionally, the levy is required by all employers with pay bills of more than £3million, regardless, if they do not take any apprentices.

Once the employers have paid the levy, they can now obtain funding for apprenticeships via an online account. Take note that these funds will likely expire after 24 hours if employers fail to spend them.

Employers should spend these funds on apprenticeship training using authorised providers. Additionally, the government will be giving employers an extra 10% top-up for these funds.

Let’s start doing a quick computation. In case your employees are earning £15,000 gross per annum and you have 300 employees, then your pay bill will amount to £4.5 million. Consequently, you will have a levy amount of 0.5% which is equivalent to £22,500, minus £15,000 levy allowance, the result will be £7,500, which is the annual levy that you have to pay. Since the government will provide a 10% top-up which is equivalent to £750, then you will have a total amount of £8,250 to spend.

For the purposes of the levy, an apprentice is defined as any employee who is enthusiastic in acquiring training so they can learn new skills. However, 20% of their time should be spent on off-the-job training.

In 2017, the government set a target of acquiring an additional 3 million apprenticeship ‘starts’ by the year 2020. Nonetheless, ever since the levy was introduced, apprenticeship ‘starts’ have started to decline significantly. A lot of employers disapprove this scheme since they consider this as another tax on business, or they believe that it is not flexible and too complicated. Some employers regard the 20% off-job-training time as a major issue.

Still, in April 2019, there were reports of an increase in 2017/18 of advanced and higher-level apprenticeships being launched by businesses. However, on the overall, they found out that the number of apprenticeships is still lower compared to the time that the levy was not yet introduced.

When it comes to the claim that the levy is just another business tax, the reports show that between April 2017 and November 2018, the total amount of levy paid by all companies was in the range of £4.5billion.

During the period between April 2017 and September 2018, the total amount that has been paid out to the providers was only £370million. According to one commenter, it is expected that in April 2019, all the payments that were entered into the levy fund in April 2017 will be absorbed by the government since they were not spent and the funds have expired after 24 months. This could probably reach to £200 million per month. Taken from the training funds, this amount will be transferred to government funds. And the same occurrence will happen every month afterwards!