by constructaquote - 4 April 2018
With the construction industry feeling the strain of the skills gap and the 2018 Carillion collapse leaving thousands of apprentices without jobs, now is a great time for construction employers to expand their workforce with eager talent in the form of apprentices.
81% of employers say apprentices make their business more productive, with the average apprentice completer increasing business productivity by £214 per week.
If you’re thinking of taking on an apprentice, we’ve created this guide to answer some key questions.
First of all, let’s start with the benefits of hiring apprentices. For years, apprenticeships have been proven to work well for both employer and apprentice and there are now more than 250,000 UK workplaces offering the schemes.
The main benefit for the apprentice is that they have the opportunity to earn while they learn. While the apprentice is working towards achieving a nationally recognised qualification (NVQ), they are also being paid to work – just like a regular full-time job.
Some of the employer benefits of hiring apprentices include:
Apprenticeships have evolved over the last decade and can now be undertaken in a range of craft skills and office-based roles. Apprenticeships are available at different levels, from intermediate level 2 to advanced levels 4,5 & 6. The range in levels provides the apprentice with the opportunity to excel further in their chosen skill should they wish to.
Apprenticeships are very popular in the construction industry and there is a wide range of trades available including bricklaying, carpentry, joinery, demolition, glazing, dry lining, painting & decorating and scaffolding.
All apprenticeships come with their own Apprenticeship Framework set by the government.
There are two main routes for hiring an apprentice, either directly or via a third-party provider. Deciding which route is right for you depends on whether you can commit to employing an apprentice for the duration of their framework.
Apprentices can be hired via the following two routes:
1. Hiring an Apprentice directly
This is considered as the traditional way of hiring and can result in apprentices staying with the firm when their apprenticeship ends. This is because hiring directly creates a stronger commitment between both employer and apprentice. If you decide to hire an apprentice directly, grants are available for Construction Industry Training Board (CITB) levy payers and non-levy payers who are in-scope. There are also grants of £1,500 available for small companies.
2. Hiring an Apprentice via a Shared Apprenticeship Scheme (SAS)
If you’re hiring through a SAS, the apprentice will typically be employed by a third party who will be responsible for sourcing and pre-screening the candidates. This is considered as a better solution for smaller businesses, especially those with short-term client contracts.
As these apprentices are employed by someone else, you won’t be eligible for any grants or funding and will have to pay an admin fee for their service.
The best way to find an apprentice is through the Construction Industry Training Board (CITB). They are the largest provider of apprentices in the UK and have over 45 years’ experience of training apprentices up and guiding them through their journey.
CITB also provides support for employers throughout the apprenticeship process. This includes:
The cost of an apprentice will depend on the apprentices’s age, the type of company you run, and how you employ the apprentice (either directly or via an SAS).
Since April 2017, employers of large companies in the UK must pay into the apprenticeship levy. This means that companies with an annual pay bill of £3m or more must pay 0.5% of the pay bill into the levy every month. The levy is a digital apprenticeship account and gives employers up to two years to spend their funds on apprenticeship training and assessment costs. The funds can be used to re-train existing employees or new apprentices.
Generally, the training required for young apprentices is usually covered by funding, especially if you use the CITB to source your apprentice. If the apprentice is 19 years old or older, employers may have to pay half of the training costs. For apprentices aged 25 or older, the employer is required to make more significant contributions to the apprenticeship.
Employers are legally required to pay the apprentices’s wages in line with the governments’ National Minimum Wage.
There is a specific National Minimum Wage (NMW) band for apprentices. This applies to apprentices within the first year of their apprenticeship that are aged under 19 or 19 and over. The current rate is £3.70 per hour.
Apprentices in their second year of an apprenticeship that are over the age of 19 must get the correct NMW for their age band.
Employers can choose to pay more than the minimum wage if they want to, however, is it illegal to pay apprentices lower than the amount they are entitled to by law.
Typically, part of the training cost is funded by the government or the local council which is paid directly to the provider.
Apprentices are considered as employees which means that you will have to pay National Insurance Contributions (NICs) in the same way as everyone else.
However, from April 2016, employers of apprentices under the age of 25 will no longer be required to pay secondary Class 1 (employer) National Insurance Contributions (NICs) on earnings up to the Upper Earnings Limit (UEL), for those employees.
This is due to the Governments’s proposal to increase the number of apprentices in work by making it cheaper for employers to hire apprentices. You can read more about it in this Government notice.
The apprentice must be under 25 years old and following an approved UK government statutory apprenticeship framework. Frameworks can differ depending on the location of the apprentice. We recommend employers find out what applies to their area here.
If you employ the apprentice directly, there are some government grants you could apply for. For employers that pay into the CITB levy, or in-scope employers, a grant of £6,000 over two years is available for Level 2 apprentices and £10,250 is available for Level 3 apprentices.
If your company has less than 50 employees, you can apply for an Apprenticeship Grant for Employers (AGE) of £1,500 for up to 10 apprentices each aged 16-24. There may also be grants available in your local area, so it is worth searching online and viewing the local council’s website.
For employers that choose a Shared Apprenticeship Scheme (SAS) with the CITB, CITB will fund the training of the apprentice with a grant of up to £10,250.
Employers in England may also be able to claim £1,500 from the National Apprenticeship Service if they have not recruited an apprentice in the last 12 months.
The Apprenticeship Grant for Employers is available in addition to any grants provided by the CITB to help pay the apprentice’s wages.
Your responsibilities when taking on an apprentice vary depending on the level of the apprenticeship and the way you chose to hire the apprentice.
In general, employers are expected to:
Apprentices do not work under standard contracts of employment, and the documents vary based on the location of the apprenticeship.
If you hire an apprentice in Scotland, a contract of apprenticeship must be used. If the apprentice is employed in England and Wales, an apprenticeship agreement must be used.
For apprentices with an apprenticeship agreement, the apprentice must be treated as if they are a regular employee. This means the company’s normal disciplinary actions and dismissal procedures must be used. If a tribunal occurred, some allowances would be expected for the apprentice.
For apprentices employed with a contract of apprenticeship, the apprentice should not be treated like a regular employee. Instead, employers are expected to provide extra support and training to guide the apprentice throughout their learning and help them become qualified in their trade.
Employers that do not dismiss apprentices correctly could face substantial liability as damages will cover the remainder of the apprenticeship and future losses for the apprentice.
While apprenticeships require significant effort, business owners should not ignore the many benefits of taking on apprentices.
Apprentices, in general, are keen to learn and develop in their career, and the right talent can help grow your business by bringing new skills to the table and a fresh perspective. Apprentices are also a more financially viable option for business owners looking to expand their workforce without a hefty wage bill.
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