This guide looks at how apprenticeships and what you need to know. Taking on an apprentice may seem daunting to a busy organisation, but an apprentice could provide you with valuable support. However, there are pros and cons to consider.

It is worth noting that the term “apprentice” can apply to many different scenarios. You may have a customer service team who require upskilling. As an employer, you could create apprenticeships for some of these people, tapping into the funding available to support their training. Funding for apprentices is available from the government – the Apprenticeship Levy.

Apprenticeship Levy

What is the Apprenticeship Levy and how does this work? This is an important part of apprenticeships and what you need to know, it was announced in the 2015 budget and introduced in 2017, its aim was to make it easier to invest in apprenticeships by funding the costs of training and assessments for apprentices. Each employer will have an annual levy allowance of £15,000.

If your annual pay bill is more than £3 million, you will be liable for the apprenticeship levy. This is collected at a rate of 0.5% through your PAYE system in the same way as income tax and national insurance contributions. As many large organisations are already paying towards this levy, it makes sense to capitalise on this funding to bring apprentices into the workplace.

For employers with a paybill of less than £3 million and who do not pay the levy can access government funding towards the cost of the apprenticeship training. Employers can receive 95% of the apprenticeship cost and only be liable for the remaining 5% cost set by the training provider.

Off-the-Job apprenticeship training

An apprentice will need to spend a certain amount of time in your workplace and sometimes in a training setting doing “Off-the-job training”. Up until August this year, 20% of apprenticeship training needed to fall into this category.

Further, with apprenticeships and what you need to know is that in the Spring Statement, Chancellor Rishi Sunak reported that the apprenticeship levy has not been utilised by as many businesses as was hoped. As a result, there are some new draft rules for funding coming in. Apprentices will no longer be required to do 20% of their working hours as off-the-job training. Instead, this is changing to 6 hours per week.

Off-the-Job training can often be misinterpreted by employers, due to concerns that an apprentice might impact on resources. In fact, this type of training can include the following:

  • Practical training – team meetings. Mentoring or shadowing a colleague/manager. Attending an industry event or a site visit.
  • Teaching of theory – workshops, lectures, role playing and online learning.
  • Learning support – written assessments or assignments.

How to take on an apprentice

There are different ways to take on an apprentice, you can engage an apprenticeship agency. They can assist you with the selection and management of the apprentice.

As an employer, you should agree a total price for each apprenticeship, which needs to include all training costs and the cost of the end-point assessment.

The following questions will help you decide on whether you should take on an apprentice:

  1. Do you have a genuine job for this apprentice? You must be able to offer the apprentice a contract of service long enough for them to complete their training. This can also be provided through an external apprenticeship training agency.
  2. Will the job role provide the right opportunity? The apprentice needs to learn relevant skills, knowledge and behaviours to achieve their apprenticeship.
  3. Are you able to pay the apprentice’s wages? Although the apprenticeship levy gives you £15,000 for each apprentice, their salary must be met by the employer.
  4. Who will supervise the apprentice? You must have someone available to supervise and support them. In some cases, they may also be required to provide training to your apprentice, if you are not using an apprenticeship agency.
  5. Do they have the right to work in the UK? Employers need to check the eligibility of the apprentice, which includes right to work checks and they must spend at least 50% of their working hours in England.

What documentation should the apprentice have?

Under the Apprenticeships, Skills, Children and Learning Act 2009, an apprentice is deemed to be an employee if the required conditions are met. A written statement of employment particulars must be provided no later than day one. There are additional clauses to be provided and a commitment statement that must be signed by the employer, apprentice, and the training provider.

It’s likely that you will use a fixed-term contract for the apprentice meaning that dismissal can take place after the apprenticeship has concluded. In practice, you are unlikely to invest in an apprentice and then not continue to employ them after the apprenticeship has successfully finished. Ensure that you issue a new employment contract after the end of the fixed-term contract.

Caution – traditional apprenticeship

In respect of apprenticeships and what you need to know, be mindful that the employment documentation surrounding an apprentice must be accurate. A failure in this area could result in the apprenticeship being deemed a ‘traditional contract of apprenticeship’ which makes managing them much more difficult in the event of misconduct or dismissal. The remaining wages in connection with the outstanding apprenticeship and a sum compensating the apprentice for future loss of earnings can be awarded to the apprentice if they make a successful claim against your company in the event of you dismissing them before the end of the apprenticeship.

Apprenticeships and what you need to know – statutory rights

Apprentices have the same statutory rights as employees including the national minimum wage (apprenticeship rates), not to be unfairly dismissed (after 2 years’ service), statutory leave and not to be discriminated against.

Do you need advice with an apprenticeship?

Jude Read-HR offers ad hoc HR advice as well as regular retained support. For more complex cases and larger projects, we can also support you on a consultancy basis.

If you’d like HR advice relating to an apprenticeship scheme, or you would like to know more about our wide range of HR services, please get in touch.

Department for Education – Apprenticeship funding rules August 2022 to July 2023
CIPP – Guide to the Apprenticeship Levy
Apprenticeships at the University of Cambridge


Apprenticeship, Employment Documents

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