Employing an Apprentice

Apprenticeships have become an increasingly popular recruitment option for employers across many different parts of the economy. By employing an apprentice, you can develop workers in the skills your business needs, while benefiting from training support and government funding.

Employing an apprentice offers UK employers Apprenticeships are open to individuals aged 16 and over, and provide a valuable opportunity to combine practical on-the-job training with formal study.

Employers must keep in mind, however, that apprentices are employees. As a result, they have the same employment rights as other employees, and you owe them the same legal responsibilities in relation to pay, benefits, rest breaks and time off work. You also have to identify a suitable framework or standard that your apprentice will work to, as well as an approved apprenticeship training provider.

In this guide, we set out the key considerations for employers looking to hire an apprentice.

 

What is an apprentice?

 

An apprentice is someone who learns the necessary skills for a job by performing a real job role in the workplace while being mentored by experienced employees. The apprentice combines their work with some study time. They will have achieved a framework or standard that equates to recognised levels of educational achievement (GCSEs, A-levels, undergraduate degree, etc.) as well as the ability to perform that specific role in their business sector at the end of the apprenticeship. Apprenticeships are open to those aged 16 or older.

The apprentice should be able to perform at an industry-recognized level after completing their apprenticeship.

 

Who can hire an apprentice?

 

Apprenticeships are open to all types of business, from sole traders to limited companies. The employer must be registered with HMRC, as they will be required to pay income tax and National Insurance Contributions (NICs) through the PAYE system for the apprentice (although see below for exemptions from paying NICs in certain circumstances).

If you don’t want to take on the responsibility of hiring and training an apprentice, you have the option of partnering with an Apprenticeship Training Agency (ATA). The ATA hires the apprentice on your behalf while they work in your organisation.

 

How to hire an apprentice

 

You will need to follow a number of steps to employ an apprentice. First, you will need to choose an apprenticeship training course and training provider from the list of providers on the government’s website. You should then check the level funding available to you as contribution towards the training and related costs.

You can then advertise to recruit an apprentice; you have the option of placing an external advertisement for an apprentice, approaching a training provider for a suitable candidate, or hiring an apprentice from within your current workforce.

When you have selected an individual, you should make an apprenticeship agreement and commitment statement with them.

 

How long do apprenticeships last?

 

An apprenticeship has to last a minimum of one year, but can be up to five years long depending on the level the apprentice is studying. It must also include at least 1,500 hours of combined on-the-job and off-the-job training over its duration.

 

How much are apprentices paid?

 

From April 2024, the National Minimum Wage for apprentices is £5.28 per hour for those aged under 19 or in the first year of their apprenticeship.

Apprentices aged 19 or over, who have completed their first year, must be paid the NMW applicable to their age group:

 

• 23 and over: £11.44
• 21 to 22: £10.18
• 18 to 20: £7.49
• Under 18: £5.28

 

Apprentices are entitled to the minimum wage for their age if they are both are aged 19 or over and have completed the first year of their apprenticeship.

Employers may opt to pay more.

 

Apprentice rights & entitlements

 

Apprentices are covered by the same employment law protections as other employees, including protection against unfair dismissal after two years’ service, discrimination under the Equality Act 2010 and eligibility for statutory redundancy pay where applicable. In relation to dismissal, the majority of apprentices are hired on a fixed-term basis, and non-renewal of a fixed-term contract would still be considered a dismissal under the law. As a result, if you want to dismiss an apprentice who has worked for you for more than two years, you must provide a lawful reason for doing so and follow a fair dismissal procedure. An employer has no additional legal obligation to find work for an apprentice at the end of their apprenticeship.

Where there is a redundancy situation, apprentices would only be entitled to statutory redundancy pay if they have been employed for more than two years.

Apprentices are entitled to paid holidays and rest breaks, as well as sick pay and any other benefits you provide to your employees, such as gym membership.

Rest breaks are typically 20 minutes for every six hours worked, 11 hours for every 24 hours worked, and one day off per week or two days per fortnight. If you hire a 16- or 17-year-old apprentice, you must give them a 30-minute break if they work for four hours and thirty minutes or more, as well as twelve hours of rest per day and two days of rest per week.

Apprentices earning £10,000 or more annually must be automatically enrolled into a workplace pension scheme if they are aged between 22 and the state pension age. Employers must contribute to the pension as per auto-enrolment regulations. However, an apprentice as young as 16 years old can request to join the pension scheme, and you must allow this and pay the employer contributions as usual, depending on their earnings.

 

Apprenticeship contract of employment

 

The apprenticeship agreement is a legal document that you and your apprentice must sign. Employers must ensure the apprenticeship agreement meets legal requirements. Failure to provide a compliant agreement may result in the apprentice being treated as a standard employee, making it harder to end the arrangement early. The agreement is separate from, but will be included in, the employment contract. It must include the following:

 

• the apprentice’s skill, trade, or occupation;
• the apprenticeship standard/level;
• the apprentice’s place of employment;
• the apprenticeship start and end dates (a minimum of twelve months up to a maximum of five years);
• the practical period start and end dates, during which the apprentice is expected to work while also receiving training;
• the amount of off-the-job training, which must account for at least 20% of the apprentice’s paid hours and occur during the apprentice’s regular working hours. This does not include math and English learning up to Level 2 (roughly GCSE grade C and above).

 

Apprentices should work for a minimum of 30 hours a week up to a maximum of 40 hours, including the time spent away from work at college or in training. Part-time apprenticeships can also be agreed, at a minimum of 16 hours per week.

On-the-job training will vary depending on the nature of the job, but an apprentice should be assigned a mentor and work alongside experienced employees.

It is up to the employer and the training provider to decide how off-the-job training will be delivered. For example, the apprentice could go to college one day a week or complete more intensive training blocks and be away from work for longer periods of time.

Off-the-job training can also be provided at the workplace as long as it is not part of the apprentice’s regular responsibilities.

 

Apprenticeship levy

 

The amount of financial assistance you can get from the government is determined by whether or not your company pays the apprenticeship levy.

Businesses with an annual wage bill of more than £3 million must pay the apprenticeship levy. It is charged at 0.5 percent of your total pay bill for the year to date. There are specific rules for calculating the levy that vary depending on your industry and corporate structure, so it’s worth double-checking. If your company pays the levy, the funding arrangement is determined by whether your company is based in England, Scotland, Wales, or Northern Ireland, as this is a devolved issue.

In England, the apprenticeship levy is paid to HMRC on a monthly basis through the PAYE system. The levy funds can be used to pay for apprenticeship training and assessment. Employers who do not pay the levy must contribute 5% of the training costs, with the government covering the remaining 95%. Unused levy funds expire after 24 months unless transferred (up to 25%) to another employer.

Furthermore, employers are exempt from paying secondary Class 1 National Insurance Contributions (NICs) for apprentices under the age of 25 on earnings up to the Upper Earnings Limit of £967 per week (2024 threshold). Apprentices themselves still pay NICs as usual.

 

Employing an apprentice FAQs

 

What is an apprentice?

An apprentice is someone who combines practical on-the-job training with study to develop the skills needed for a specific job role. Apprentices are employed and earn while they learn.

 

Who can hire an apprentice?

Any business, regardless of size, can hire an apprentice. Employers must provide a structured training programme and a compliant apprenticeship agreement.

 

What employment rights do apprentices have?

Apprentices are entitled to the National Minimum Wage, paid holidays, sick pay, rest breaks, and other statutory employment rights, including protection from unfair dismissal after two years of service.

 

How much do I need to pay an apprentice?

Apprentices aged under 19 or in their first year must be paid the apprentice rate of the National Minimum Wage. Older apprentices or those in subsequent years must be paid the rate for their age group.

 

What is off-the-job training?

Off-the-job training must account for at least 20% of an apprentice’s paid working hours. This can include classroom learning, training sessions, or practical tasks that develop new skills.

 

How long does an apprenticeship last?

Apprenticeships must last a minimum of 12 months and can extend up to five years depending on the level and qualification.

 

What is the apprenticeship agreement?

An apprenticeship agreement is a legal document outlining the training plan, employment details, and responsibilities of both the employer and the apprentice.

 

Do I need to pay National Insurance for an apprentice?

Employers do not have to pay National Insurance contributions for apprentices under the age of 25, provided they earn below the Upper Earnings Limit.

 

What funding is available for hiring an apprentice?

If your annual pay bill exceeds £3 million, you must pay the apprenticeship levy, which funds training. Smaller employers pay 5% of training costs, with the government covering the remaining 95%.

 

What happens when the apprenticeship ends?

Employers are not legally obligated to offer a permanent role after the apprenticeship ends. However, many businesses retain apprentices who have proven to be valuable to their organisation.

 

What happens if an apprentice is made redundant?

Apprentices with more than two years’ service are entitled to statutory redundancy pay. Employers must follow redundancy processes in line with employment law.