Employing an Apprentice

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

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.

 

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.

 

How much are apprentices paid?

Apprentices under the age of 19 are entitled to the national minimum wage, which from April 2021 is £4.30 per hour, increasing to £4.81 per hour from April 2022, though many employers pay more.

If the apprentice is 19 or older but still in their first year of apprenticeship, they are also entitled to the national minimum wage for apprentices. They must, however, be paid the national minimum wage in the second and subsequent years of their apprenticeship.

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:

 

23 and over 21 to 22 18 to 20 Under 18 Apprentices
From April 2021 £8.91 £8.36 £6.56 £4.62 £4.30
From April 2022 £9.50 £9.18 £6.83 £4.81 £4.81

 

Apprentice entitlements

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 who meet the qualifying conditions and are 22 or older are also eligible for auto-enrolment into a pension scheme. 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.

Apprentices are subject to the same employment laws as other employees in relation to dismissal. The majority of apprentices are hired on a fixed-term basis, and non-renewal of a fixed-term contract is 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.

 

Apprenticeship contract of employment

The apprenticeship agreement is a legal document that you and your apprentice must sign. It 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.

You will then receive a 10% government supplement to this amount, which you can use to pay for apprenticeship training through approved providers with this fund (the levy plus 10%). If you do not spend the money within 24 months, it will be forfeited. It is, however, possible to transfer up to 25% of your current funds to a new employer. That employer could be close to you geographically or in your industry sector.

If your company does not pay the apprenticeship levy, it will be responsible for paying 5% of the cost of training and evaluating your apprentice. This will be paid directly to the training provider in agreed-upon instalments.

Furthermore, if you hire an apprentice under the age of 25, you will not be required to pay secondary Class 1 employer National Insurance Contributions on their earnings up to the Upper Earnings Limit. This means that apprentices under the age of 25 who earn less than the higher tax rate (£827 per week) do not have to pay NICs.

 

Employing an apprentice FAQs

Can anyone employ an apprentice?

Employers, including sole traders and limited companies, can hire apprentices.

How much does an employer pay towards an apprentice?

If the employer does not have to pay the Apprenticeship Levy, they pay 5% towards the cost of training and assessing the apprentice and the government will pay the remaining 95% up to the funding maximum If the employer does pay the levy, they will receive funds to spend on training and assessing your apprentices, and the government will add 10%.

Can a sole trader employ an apprentice?

Yes, sole traders can hire apprentices, provided they are registered with HMRC as an employer and follow the steps to recruit and employ the best candidate for your business.

Last updated: 17 December 2021

Author

Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.

She is a recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.

Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals

About DavidsonMorris

As employer solutions lawyers, DavidsonMorris offers a complete and cost-effective capability to meet employers’ needs across UK immigration and employment law, HR and global mobility.

Led by Anne Morris, one of the UK’s preeminent immigration lawyers, and with rankings in The Legal 500 and Chambers & Partners, we’re a multi-disciplinary team helping organisations to meet their people objectives, while reducing legal risk and nurturing workforce relations.

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