The legals of taking on an apprentice

How can apprenticeships benefit your business?

Hiring an apprentice is beneficial for both an employer and the apprentice. Apprentices can be hired at different stages including school leavers, university graduates or individuals looking to change careers. As an employer you can get funding from the government to help pay for apprenticeship training.

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Hiring an apprentice is an effective way to nurture and develop a skilled and qualified workforce. By training apprentices early on you are able to adapt the training to the needs of your business.

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How to hire an apprentice?

Before hiring an apprentice you will need to create an apprenticeship service account via the government online service portal which will help you set up and manage your apprenticeships, this is a requirement for all apprenticeships in England.

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Why do you need an apprenticeship service account?

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The apprenticeship service account allows you to:

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• Manage apprenticeship funding
• Set up and approve apprentices
• Advertise roles for apprentices on the ‘Find an apprenticeship service’
• Approve training costs
• Check payments to training providers
• Give training providers permission to carry out tasks on your behalf
• Provide feedback on apprenticeship training

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In order to create an account you will need an email address, permission to add your PAYE schemes to the account and permission to accept the employer agreement on behalf of your organisation. In addition, you will need either a Government Gateway login for your organisation or your accounts office reference number (AORN) and employer PAYE scheme reference number.  

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Employers and Apprenticeship Checklist

This checklist will help employers navigate the legals of taking on an apprentice.

Is the apprentice eligible?

• Does the apprentice have the right to work in England?
• Do they spend at least 50% of their working hours in England?
• They must be employed by you, a connected company or connected charity as defined by the HMRC.

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What Agreements do you need to hire an apprentice?

• A contract of employment must be signed between you and the apprentice including details of pay, working hours and working conditions.

• You must sign an apprenticeship agreement with the apprentice (either as part of the employment contract or separately) at the start of the apprenticeship which gives details of:

• The skill, trade or occupation the apprentice is being trained for
• The name of the apprenticeship they are working towards
• The dates during which the apprenticeship is expected to take place
• The amount of off-the-job training they will receive

• An apprenticeship commitment statement between you, the apprentice and the training provider

• This gives details of how you, the training provider and the apprentice will support the achievement of the apprenticeship.
• It will include the planned content and schedule for training, what is expected and offered by you, the training provider and the apprentice.
• You should make the person in charge of the day to day management of the apprentice aware of the commitments that have been made.

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How to find a Training Provider?

You can use the ‘find apprenticeship training for your apprentice’ page on the gov.uk website to find a training provider. You must first choose an apprenticeship training course and then find a training provider.

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How to receive Funding for an Apprenticeship?

The government helps employers cover the cost of the apprenticeship training and the amount received depends on whether you pay the apprenticeship levy or not.

For the purposes of the levy, an employer is someone who is a secondary contributor, with a liability to pay Class 1 secondary National Insurance contributions (NICs) for their employees.

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Is your pay bill more than £3 million per year?

A pay bill is the total amount of wages paid or payable to an employee or group of employees.

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If the answer is No:

You will not be required to pay the apprenticeship levy, but you will be required to pay 5% towards the cost of training and assessing an apprentice. The government will pay the remaining 95% of the funding band maximum for the type of apprenticeship.

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If you have fewer than 50 employees, the government will pay 100% of the apprenticeship training costs up to the funding band maximum for apprentices aged:

• 16 to 18
• 19 to 24 with an education, health and care plan provided by the local authority or where the individual has been in the care of their local authority

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Where the funding band maximum is exceeded, you will need to pay the additional costs. For apprentices that started before 1 April 2019 you will need to contribute 10% and if you exceed the funding band maximum, you will need to pay all additional costs.

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As a smaller employer, who does not pay the apprenticeship levy, you will need to reserve funds for apprenticeship training in the ‘finance’ section of your apprenticeship service account. You can reserve funds up to 6 months in advance of the apprenticeship start date.

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If the answer is Yes:

As an employer with a pay bill of more than £3 million you are required to pay the apprenticeship levy (payable to the HMRC via PAYE). You are able to manage funds using the apprenticeship service and spend it on training and assessing the apprentice. The government will add an additional 10% top up to the funds you have in your account. If you don’t have sufficient funds you can pay 5% of the outstanding balance and the government will pay the remainder. This is up to the funding band maximum allocated to each apprenticeship and may vary depending on the type of apprenticeship.

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For apprentices that started before 1 April 2019 you will need to contribute 10% and if you exceed the funding band maximum, you will need to pay all additional costs. However, all companies will have a levy allowance of £15,000 a year which can be offset against the apprenticeship levy bill.

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Example:

Pay Bill: £5,000,000:

Levy Sum: 0.5% x £5,000,000 = £25,000

Deduct Levy Allowance: £25,000 - £10,000 = £15,000 Annual Levy Payment

(For the avoidance of doubt this is for illustrative purposes and does not highlight the allowance is paid in monthly instalments)

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Paying the apprentice

It is your responsibility to pay the apprentice for their normal working hours and any training they do as part of the apprenticeship. You must pay at least the national minimum wage depending on their age and the year of apprenticeship training they’re in. Currently the apprentice rate is £4.30 for under 19’s and all apprentices in their first year of training, this increases to £4.81 from 1 April 2022. For further information see the ACAS guide here.

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National Insurance Contributions

You may not need to pay Class 1 National Insurance contributions for an apprentice, if the apprentice is:

• Under 25
• On an approved UK government apprenticeship standard or framework
• Earns less than £967 a week/ £50,270 a year

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The apprentice will continue to pay Class 1 insurance contributions through their salary as an employee. You can check if the apprentice is on a statutory apprentice using the links found on the government guidance here. To show the apprentice meets the requirements above, you will need to provide evidence of a written agreement between you, the apprentice and a training provider and evidence to show the government funding is received for the apprenticeship.

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What is Off-the-job Training and On-the-job Training?

During the apprenticeship the apprentice will receive 2 types of training:

1. Off-the-job training is delivered by the training provider during the apprentice’s normal working hours. Apprentices must spend at least 20% of their working hours completing off-the-job training. It can be flexible and does not need to be 1 day a week, it can be part of a working day or in time blocks across the week. The training may be in the form of online training, at the workplace or at a college/university with the training provider.

2. On-the-job training is delivered by you as an employer, by training and supervising them to perform the job they have been hired for.

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In addition, the apprentice may also need to study for english and maths qualifications as part of the apprenticeship. You will need to allow the apprentice time to study for this within their working hours and it does not count as part of the 20% minimum off-the-job training.

What is a Commitment Statement?

An apprenticeship commitment statement is signed between you, the training provider and the apprentice. It must include details of:

• The planned content and schedule for training
• What is expected and offered by you, the training provider and the apprentice
• How to resolve queries or complaints

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The commitment statement must meet the criteria set out in the apprenticeship funding rules which state the commitment statement must include:

• The name of the apprentice, their job role and their normal working hours (paid hours excluding overtime).

• Details of the employer and main provider (and subcontractors involved in the delivery of the off-the-job training).

• Details of the apprenticeship, including the name of the apprenticeship framework or standard, the level, the start and end dates for the apprenticeship and (for standards) the dates relating to the practical period of training.

• The start date set out in the commitment statement must align with the start date in the apprenticeship agreement.

• The amount of off-the-job training that will be delivered will meet the 20% minimum requirement.

• The individuals’ prior learning must be taken into account before calculating the off-the-job requirement and designing the programme.

• The planned content/components and schedule of eligible training. This should include key milestones for mandatory or other qualification achievements. It should also be clear if the component has been used towards the calculation of the minimum 20% off-the-job training requirement.

• A list of the organisations delivering the training content/components, including english and maths, and the EPA organisation. It is understood that not all EPA organisations will be known at the start of the apprenticeship and so the commitment statement must be updated as soon as these details are known and confirmed.

• An agreement of what is expected from, and offered by the employer, the apprentice, the main provider to achieve the apprenticeship and details of how the parties will work together. This must include contact details and the expected commitment from each party for example:

• The apprentice: attendance and commitment to their off-the-job training
• The employer: commitment to wages and time off to train during working hours
• The training provider: delivery of training, support and guidance

• Details of tripartite progress reviews must be included, including the frequency and format to discuss the progress to date against the commitment statement and the immediate next steps required.

• The process for resolving any queries or complaints regarding the apprenticeship, including quality. This must include details of the escalation route within the training providers organisation and the escalation to the ESFA through the apprenticeship help desk (08000150400 or email nationalhelpdesk@apprenticeships.gov.uk).

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Mentoring & Training - Supporting your apprentice

In order to ensure the apprentice is successful you are encouraged to offer additional support which may include:

• Induction

• Information on what is expected, for example dress code, time management and general work behaviours
• An opportunity to meet colleagues and how their role fits the wider team and who they can go to for support
• An introduction to company policies
• An outline of their role and objectives to help them get started

• Mentoring

• A powerful tool to help set the apprentice for success is assigning a mentor or coach, someone other than the apprentice’s direct line manager, who can provide support and guidance.
• A mentor can provide useful insight through their knowledge and experience alongside providing encouragement and support to build the apprentice’s confidence within the role.

• One-to-one guidance

• Regular informal meetings allow the line manager and apprentice to discuss current work and development and provide a way to monitor the apprentice’s progress against their objectives.

• Social and networking opportunities

• It can often be a daunting experience joining a business and many employers find that social and networking opportunities help the apprentice flourish and fit into the wider team. You may:

• Arrange the apprentice to meet current team members individually or collectively
• Organise networking events with colleagues and relevant industry body’s to support the apprentice’s development
• Organise team or company-wide social activities

• Performance reviews

• This is a great way to improve communication with the apprentice and helps with their personal development.
• It will help the apprentice identify:

• Business goals and how the apprentice fits into achieving those goals
• What skills and knowledge they need for the role
• Areas they need to improve
• Areas they are doing well in
• Performance problems and how to resolve them

• Mental health and wellbeing support

• If an apprentice struggles with mental health, they can access the Work Mental Health Support Service for Apprentices. This service is free and funded by the Department for Work and Pensions. This service provides apprentices with access to mental health experts.
  
  

The Learning and Work institute has provided comprehensive guidance for supporting apprentices, on behalf of the Department for Education, which can be found here.

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End Point Assessment

The End Point Assessment (EPA) is an assessment of the knowledge, skills and behaviours the apprentice has learned throughout the apprenticeship and confirms they are occupationally competent. The assessments are conducted by independent assessment organisations.

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You and the training provider must select the End Point Assessment Organisation (EPAO) as soon as possible once the apprenticeship commences. If the apprentice is working towards an integrated degree apprenticeship the training provider will complete the EPA.

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The apprentice will receive their apprenticeship certificate after they have passed all components of the EPA including the requisite standards for english and maths.

Levy employers will use their apprenticeship levy funds to cover the assessment costs and non-levy employers are able to access funding to cover their assessment costs up to the funding band maximum.

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To find an EPAO follow the gov.uk guidance page here.

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The Assessment

Each apprenticeship includes an EPA plan which describes how the apprentice will be tested against the criteria using suitable methods. The apprentice may need to complete:

• A practical assessment

• An interview

• A project

• A written test

• A multiple choice test

• A presentation

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Preparation

In order to ensure the apprentice has time to prepare, you should engage with the EPAO at the start of the apprenticeship to understand how the apprentice will be assessed. In addition:

• Ensure the apprentice knows who their EPAO is

• Ensure the apprentice engages with their EPAO to understand what is expected

• Work with the training provider to develop mock tests to prepare the apprentice

• Discuss assessment preparation with the apprentice during review meeting

• Provide study leave and support for assignments

• Set out targets that are linked to the assessment requirements

• Provide feedback to help the apprentice recognise areas of improvement

• Ensure reasonable adjustments are in place for the assessment, where needed.

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After the assessment

If the apprentice successfully completes the apprenticeship and passes their assessments, they will be rewarded with a certificate. The EPAO will request the certificate on your behalf. In some cases, for some apprenticeships, passing the EPA leads to a professional recognition by an authorised body.

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If the apprentice fails one or more of the EPA they will be offered the opportunity to resit or retake. You and the training provider should consider a plan which responds to the feedback provided by the assessor to ensure the best chances of success for the apprentice.

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Progression

Once the apprentice has successfully completed the apprenticeship and EPA, and has received a certificate it might be worth considering how you wish to proceed whether that be an increased salary, a promotion or the chance to specialise further into a new role.

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The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.