SUMMARY: Four reasons to engage an apprentice and how to overcome the main risk
The government has been encouraging employers to engage apprentices and many employers are now seeing the benefits of them.
Four key benefits
1. National Insurance Contributions (“NICs”)
Since 6 April 2016, employers do not have to pay class 1 NICs for apprentices who are earning less than £827 a week (£43,000 a year) and are:
- under age 25; and
- following an approved UK government statutory apprenticeship framework.
Specific evidence is needed to show that these two requirements are satisfied. For example, an appropriate agreement.
2. Apprentice rate minimum wage
If the apprentice is in the first year of their apprenticeship or is under the age of 19, employers can pay the apprenticeship rate, which is currently £3.30 per hour.
3. Gain skills in areas your organisation needs to grow
Organisations will be constantly considering and implementing new ways to grow. Apprentices can be a cost effective way of supporting the larger strategic aim.
There could be funding available from the Skills Funding Agency to your business to support apprenticeship programmes. Further information can be found at www.gov.uk/government/organisations/skills-funding-agency
The intention is for the apprenticeship relationship to be a positive and beneficial one for the organisation and the individual. However, not all working relationships will be harmonious. If things do not work out, employers need to be able to address problems and ultimately dismiss individuals both fairly and lawfully if problems subsist; this is often where the risk lies. Why? Apprentices can have enhanced rights on dismissal, which limits the ability to terminate the agreement without potentially a significant financial liability.
Having the right agreement in place lowers the risk by ensuring an apprentice can be dismissed in the same way as an employee.
For more information on apprenticeships and how you can make them work for you, please visit: http://www.fgsolicitors.co.uk/news/apprenticeships-make-them-work-for-you/
Alternatively, if you would like more information on other contract essentials, please visit: http://www.fgsolicitors.co.uk/news/contract-essentials/
If you are considering recruiting an apprentice and want to benefit from the above advantages, without worrying about the risk, please contact us:
+44 (0) 808 172 93 22
This update is for general guidance only and does not constitute definitive advice.