Hello and welcome to our first employment update of 2017.
At this early point in the New Year we thought we’d take a look at what’s on the employment law agenda for 2017. One of the major changes due to come in to effect is the introduction of the Apprenticeship Levy from April 2017. The levy, which was announced as part of the government’s ambitious plans to create 3 million new apprentice positions by 2020, will require all UK employers with annual wage bills of more than £3 million to pay 0.5% of this total towards the cost of apprenticeship training.
Although the levy itself will only affect larger employers (estimated at approximately 2% of all UK employers), there are potential implications for companies across the board – particularly those that are considering apprenticeships as a way to boost their workforce. Employers who are not subject to the levy will have access to financial support from government for up to 90% of their apprenticeship costs, bearing approximately 10% of the costs themselves. The government will also offer a further incentive to recruit younger apprentices aged 16 to 18, or those aged 19 to 24 who have been in care, by way of an additional £1000 per apprentice.
In view of the boost of funding to apprenticeship positions, it’s anticipated that there will be an upturn in the number of apprentice positions made available at businesses across the board. Companies that have employed apprentices in the past will have some awareness about the employment laws surrounding apprentice employees. For those that haven’t employed apprentices in recent years, here are some key considerations:
• Apprentices engaged under apprenticeship agreements (as opposed to a ‘contract of apprenticeship’) can be treated by their employer in the same way as ordinary employees and do not benefit from enhanced rights (to damages) on early termination of the apprenticeship.
• An apprentice is protected against unfair dismissal and is entitled to employment protection and benefits, including holiday allowance of 20 days plus bank holidays, in the normal way.
• A business employing an apprentice, so as to protect the business, normally requires the creation and signing of an apprenticeship agreement laying out the specific obligations on the part of employer, length of apprenticeship, training provided, working conditions and the qualifications to be received at the end.
• Apprenticeship contracts are for a fixed term and unless there is a properly drafted apprenticeship agreement in place, cannot be terminated early.
• Apprentices under the age of 19 and those aged 19 or over who are in their first year are entitled to receive a national minimum wage (NMW) rate for apprentices, currently £3.40 per hour. Once an apprentice is aged 19 or over and has completed a year of their apprenticeship, they are then entitled to the NMW rate for their age. NMW rates are due to increase with effect from 1 April 2017.
• In addition to hours worked on site, apprentices are also entitled to be paid for their time spent training or studying for a relevant qualification that forms part of their apprenticeship (usually one day per week).
For further help and advice on employing apprentices, please contact either: Pam McColl or Amanda Isherwood or call us on 0161 312 1864.