What Every SME Should Know When Hiring an Apprentice

Ever wondered whether your business could benefit from appointing an apprentice? Providing a young recruit with the valuable chance to work alongside a team of experienced staff while learning job-specific skills, an apprentice could help you improve productivity by plugging a key skills gap – on a program tailored specifically to your business – and potentially aid staff retention (with an often-loyal new staff member emerging at the other side). From finding the right match to making the most of funding available, we cover the key things a small business should know before taking on that first trainee.

Whether employed by your company directly under an Apprenticeship Agreement, or found through an Apprenticeship Training Agency (ATA) for which a fee is payable, apprentices are full employees and should be treated as such under a contract of service. You’ll also need to bear a number of other factors in mind to ensure your business fully complies with apprenticeship law.

You’ll also need to bear a number of other factors in mind to ensure your business fully complies with apprenticeship law.

Apprenticeship contract – employers must offer all apprentices a contract of at least 30 hours, including external training of which should account for 20% of this time. Contracts should also be for a fixed period (from one to five years) and role-dependent, with one year being the absolute minimum. Businesses are not legally obliged to provide employment at the end of the scheme.

Apprentice pay/rights – apprentices under 19 (and over 19 for their first year of training) must at least receive the National Minimum Wage of £3.90 per hour. Upon completion of the first year, the apprentice should be paid the National Minimum Wage in accordance with their age. Working Time Regulations ensure that apprentices receive the same rights as regular employers, such as the provision of sufficient rest breaks; they are also protected by the Equality Act 2010.

Apprentice dismissal – management have the right to dismiss an apprentice as they would any other employee should they deem such action necessary. The ACAS Dismissal Code still applies in this instance, and employers must still provide apprentices with the reason for dismissal in writing. Due to apprenticeship contracts being fixed-term, a dismissal notice period would not be required.

We cover the key things a small business should know before taking on that first trainee.

Finding your first apprentice

In order to be eligible, all apprentices must first meet the completion conditions of the Apprenticeship Agreement, which relates to the framework or standard for an apprenticeship in your industry. Candidates must also have completed the required training for the qualifications stated within the framework in order to receive their apprenticeship certificate. There are four levels of apprenticeship currently available in the UK:

  • Intermediate Level 2 – equivalent to candidates with five good GCSE grades.
  • Advanced Level 3 – equivalent to candidates with two A-Level grades.
  • Higher Apprenticeships 4-7 – equivalent to candidates at foundation degree level.
  • Degree Apprenticeships 7 -8 – equivalent to candidates at Bachelor’s or Master’s degree level.

Once having established the level of proficiency required, guidance on hiring an apprentice in England can be found on the GOV.UK page here; you can also search for vacancies in Wales, Scotland and Northern Ireland. Depending on your business circumstances (and the apprentice(s) themselves), you may also wish to consider the types of funding available to help get you on track.

Depending on your business circumstances (and the apprentice(s) themselves), you may also wish to consider the types of funding available to help get you on track.

Apprenticeship funding

If your company pays (or plans to start paying) the Apprenticeship Levy, you’ll later be eligible to access government funding via an online account. This is paid via the PAYE system, and requires all businesses (with bills over £3 million) to pay 0.5% of their annual pay bill to the levy. An allowance of £15,000 per annum is then received to offset against the levy payment, yet must be spent by the employer on apprenticeship training via certified providers within the first 24 months; the government then pays a 10% top-up towards this fund.

For smaller employers that don’t pay the Apprenticeship Levy, funds must be paid directly to the provider, of which the business must pay 5% towards the cost of training. The government can then offer support by financing the remaining amount – dependent on the apprenticeship funding band. Employers with less than 50 staff members are not required to pay the 5% for an apprentice aged 16-18 years old, or for those apprentices aged 19-24 having previously been in care or with a local authority Education, Health and Care plan.

Here at Adams Moore, we’re proud to have taken on two hardworking apprentices via the BMet Apprenticeship Programme, as well as offering various work experience placements throughout the year. This has proven a fantastic opportunity for apprentices to both train and thrive within the unique environment of a small local business, while gaining valuable skills transferable to their future careers within the field. If you’d like to find out more about how an apprenticeship can help fuel your business and be financially beneficial, call us on 01827 54944 or contact us here.