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What is an apprentice?

An apprentice is someone aged 16 or over who is carrying out a work-based training programme (an ‘apprenticeship’) that offers on-the-job training together with nationally recognised qualifications. Depending on their level, apprenticeships can last for 1 to 5 years.

Why hire an apprentice?

Alongside helping to train the workforce of the future and improving people’s credentials as employees, running an apprenticeship programme can provide businesses with a bespoke recruitment drive. This lets them assess potential new employees while experienced staff pass down their skills, so that these are retained within the business. Organisations which provide off-the-job training (eg colleges and universities) can work with the business to ensure that the study element of an apprenticeship is relevant to the particular job.

Employers must pay their apprentices (at the current rate of the national minimum wage (NMW)), although certain Government funding is available (see below). Furthermore, businesses might not need to pay National Insurance Contributions for apprentices under the age of 25 on earnings below the higher tax rate. For further information, read Minimum wage.

All apprenticeships are arranged through the Government’s apprenticeship service. For more information on this, see the Government’s guidance.

What funding is available?

In England and Wales

Employers with an annual pay bill of over £3 million (or employers who are connected to other companies/charities for Employment Allowance purposes, who between them have an annual pay bill of more than £3 million) must pay a levy (the ‘Apprenticeship Levy’) to the Government. Levy-paying employers will receive funding for training and assessing apprentices, with the Government contributing 10%.

Non-levy paying employers need to pay 5% towards the cost of training and assessing their apprentices. The Government will pay the remaining 95% (up to the funding band maximum) directly to the training provider. Depending on the employer’s and the apprentice’s circumstances, extra funding may be available.

If an apprentice started before 1 April 2019, non-levy paying employers can only claim 90% of training costs from the Government, and the employer must pay the remaining 10%. This rate continues until the apprentice completes their training.

All employers receive the Government’s £1,000 additional payment for apprenticeships for each apprentice they take on who, at the start of their apprenticeship, is:

  • between the ages of 16 (or 15 if their 16th birthday is over the summer) and 18, or 

  • under 25, if they have been in the care of a local authority, or they have an education, health and care plan provided by their local authority

For more information on funding, see the Government’s guidance on funding

In Scotland

If you’re an employer paying the apprenticeship levy in Scotland, you can apply for up to £15,000 towards the cost of training your workforce, under the Scottish Government’s Flexible Workforce Development Fund (FWDF).

The FWDF is available to employers across the private, public and third sectors who pay the UK Government’s Apprenticeship Levy.

The amount of funding provided by the Scottish Government depends on the type of apprenticeship and qualification, the apprentice’s age, and whether they have spent time in local authority care or have a disability. For more information, see the website.

How do you hire an apprentice?

The first step to hiring an apprentice is choosing an appropriate apprenticeship standard to suit the particular industry (the ‘apprenticeship category’) and the desired level of qualification (eg equivalent to GCSE, A-Level, degree etc). A standard outlines what an apprentice will be doing, the skills they must have, and aims for their development.. Employers can search for standards on the Institute for Apprenticeships website. If you’re an employer in Wales and Scotland, you should contact the apprenticeship authorities for the devolved administrations in Wales and Scotland

Employers must then find an appropriate apprenticeship training provider, which they can do using the Government’s website. An end-point assessment organisation must also be found. At the end of the apprenticeship, this organisation will check that the apprentice has learnt everything they were required to learn. For more information on this process, see the Governments’ guidance on apprenticeship standards. 

Once funding has been determined, the apprenticeship can be advertised directly on the recruit an apprentice service or via the training organisation. Once the apprentice has been selected, an apprenticeship agreement must be formed and a commitment statement signed.

What is an apprenticeship agreement?

An apprenticeship agreement (for England) must be signed prior to the start of any apprenticeship. Amongst other things, it should:

  • include a statement of the skill, trade or occupation for which the apprentice is being trained

  • confirm the individual employment arrangements between the apprentice and the employer

  • state the relevant apprenticeship standard and level

  • set out the expected length of the apprenticeship

A commitment statement should also be signed which details the planned content and schedule for training, and what is expected and offered by all relevant parties (ie apprentice, employer and training organisation).

The apprenticeship agreement is not a substitute for an employment contract and it must be incorporated into the Employment contract.

What is the minimum wage for apprentices?

Employers must pay apprentices at the apprenticeship rate of the NMW (£6.40 per hour from 1 April 2024). NMW rates change every April. For more information, read Minimum wage.

What is an apprenticeship contract in Scotland?

An apprenticeship contract governs the relationship between the employer and the apprentice in Scotland. In Scotland, apprenticeship contracts are slightly  different. Most importantly, apprentices in Scotland have enhanced rights against early termination. For instance, events which might usually justify early dismissal will not justify early dismissal for an apprentice.

An apprenticeship contract should be in writing and should, amongst other things:

  • include the fixed term of the apprenticeship

  • describe the apprentice’s role

  • confirm the individual employment arrangements between the apprentice and the employer

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