What is an apprenticeship?
A formal apprenticeship must be recognised by Government and appear on the list of approved Apprenticeship Standards or Frameworks.
A formal apprenticeship is a job that allows someone to gain certification in their field whilst working, and consists of three core elements:
- On the job learning – this is the job the apprentice learns how to do with the employer. This typically makes up 80% of an apprenticeship.
- Off the job learning – delivered by a registered apprenticeship training provider. This typically makes up 20% of an apprenticeship.
- Functional skills in English and Maths – this only applies where an apprentice has not achieved English and Maths to an agreed level of difficulty as set out by the individual apprenticeship Standard or Framework
Do I need to treat an apprentice differently to other staff?
No. To the employer an apprentice is an employee and must be contracted and treated as such.
Are apprentices entitled to holiday?
Yes, in line with their employer’s holiday policy. Apprentices are subject to the same company policies and procedures as any other staff member, including benefits.
How long should an apprenticeship last?
Apprentices in England must be contracted and paid for a minimum of 30 hours a week (including their off-the-job training) for at least 12 months. Apprenticeships can be undertaken part time, but the duration of the apprentice’s contract of employment must be extended so their minimum contractual hours equate to 30 hours a week for 12 months.
For example, if an employer wishes to employ an apprentice for 15 hours a week then the duration of the apprentice’s contract of employment must be 24 months.
Some apprenticeships are expected to take longer than 12 months to complete. Employers are advised to contract apprentices for the minimum duration recommended for the specific apprenticeship.
Details of the recommended duration are all listed in the individual Apprenticeship Standard
Do I have to employ an apprentice once they’ve completed their apprenticeship?
No, but employers are encouraged to create apprenticeships with the intention on keeping their apprentice(s) on once they complete.
This isn’t mandated but is deemed preferable. It is advised that an employer’s intentions are made clear to the apprentice throughout so an apprentice can plan their progression accordingly.
Notifying an apprentice that they will not continue in their role only days or weeks before the apprenticeship ends is poor practice.
How old should an apprentice be?
Apprentices can be any age if they are aged 16 or over and have completed their final GCSE year at school. The cost of apprenticeship training is covered by the Education and Skills Funding Agency or an employer’s levy vouchers (details below), regardless of how old an apprentice is.
For those with degrees and other post-16 qualifications, candidates can only have their training funded if their apprenticeship is in a different subject to the existing post-16 qualifications they hold.
Employers that take on anyone aged 16-18 years, or a 19-24 year old who was formerly in care and has an Education and Health Care Plan, receive an additional £1000 incentive payment from the Government to help cover additional costs associated with employing individuals from these demographics.
For step by step guidance on employing and managing apprentices, please refer to our A Manager’s Guide to Apprenticeships.
What’s the difference between Apprenticeship Frameworks and Apprenticeship Standards?
Apprenticeship Frameworks are made up of Knowledge and Competency units of study, which are delivered as either combined or separate qualifications.
Frameworks are written against National Occupational Standards, which inform the individual units of learning and associated criteria.
Apprentices working to a framework are assessed on a continuous basis throughout their apprenticeship and once all criteria have been successfully passed can achieve their full apprenticeship certificate.
Apprenticeship Standards are developed by employer ‘trailblazer’ groups, who identify the core Knowledge, Skills and Behaviours of a unique occupation.
These Knowledge, Skills and Behaviours must be transferrable across, and relevant to, any employer that recruits to the respective occupation the Apprenticeship Standard describes.
The Standard must be accompanied by an End Point Assessment Plan, which the employer trailblazer group also writes to help determine how the core knowledge, skills and behaviours will be assessed at the end of the apprenticeship.
See here for guidance on how to develop a new apprenticeship standard.
Why have Apprenticeship Frameworks been switched off in England?
The Government ‘switched off’ all apprenticeship frameworks in England from 1st August 2020. These have been withdrawn as they were deemed too complex and not always fit for purpose. Anyone who started an apprenticeship against an apprenticeship framework on or before the 31st July 2020 is permitted to complete their apprenticeship as normal.
New Apprenticeship Standards, which are written directly by employers, have been designed to improve the quality of apprenticeship training ensuring they respond directly to industry need.
Who is involved in the delivery of an apprenticeship standard?
There are three main organisations involved in the delivery of apprenticeships in England:
The Employer – who is responsible for creating and providing the job and issuing a contract of employment for the duration of the apprenticeship.
The employer is responsible for paying the apprentice’s wages and selecting the training provider who will support the off-the-job training.
The Training Provider – is responsible for providing the off-the-job training to the apprentice that makes up 20% of the total apprenticeship. This time must be included in the apprentice’s contractual working hours.
Training providers are expected to respond to employer need and therefore develop occupationally current and relevant training.
They can only deliver apprenticeship training, and drawdown funding to do this, if they are on the Register of Apprenticeship Training Providers.
The End Point Assessment Organisation (EPAO) – who is responsible for assessing the apprentice’s competence in line with the End Point Assessment Plan.
They must be independent of the Training Provider and Employer (but can be known to both) and must be on the Register of End Point Assessment Organisations.
The employer is responsible for selecting the EPAO their apprentice is sent to. In some cases, only one EPAO will be available.
EPAOs are responsible for recruiting occupationally competent assessors as per the conditions outlined in the End Point Assessment Plan and must meet agreed External Quality Assurance requirements.
What is the ‘apprenticeship levy’?
From May 2017 the Government changed the way apprenticeships were funded in England, which included the introduction of the apprenticeship levy.
The levy is paid by employers with an annual pay bill of £3million or more and is calculated at 0.5% of an employer’s annual wage bill over the £3million. It is deducted like a tax from monthly PAYE.
Levy payments are then translated into apprenticeship vouchers for employers to spend on apprenticeship training and include a 10% contribution from Government.
Employers spend their vouchers through their digital Apprenticeship Service account.
Why was the Levy brought in?
The introduction of the levy was part of the Government’s apprenticeship reforms in England, which were designed to put employers in the driving seat.
The levy helps the Government increase investment in apprenticeships. The system puts employers in control of who they buy their apprenticeship training from.
These reforms are for England only, what if my company employs people who are based outside of England in the UK Nations?
The levy is paid by all UK employers who have an annual wage bill of £3million or more, but levy vouchers used to pay for apprenticeship training only applies in England.
HMRC calculates the value of an employer’s apprenticeship vouchers using data they already hold about the home address of company employees.
HMRC will work out what proportion of each employer’s pay bill is paid to employees living in England and will calculate this on a quarterly basis.
This proportion will be available to view through an employer’s digital Apprenticeship Service account.Here’s an example of how the voucher value will be calculated:
- Monthly levy payment: £1000
- Percentage of pay bill paid to employees living in England (calculated from postcode data): 75%
= £1000 x 0.75 = £750 + 10% Government top-up (£75)
- Monthly voucher value = £825
For organisations that pay the levy and that have staff based in Scotland, Northern Ireland and Wales, the relevant proportion of an employer’s levy payment will be issued to the respective devolved administration (nation).
The respective nation decides how levy funds are used and as such are not specifically ringfenced for use on apprenticeship training as is the case in England. For example, if an organisation that pays the levy has 75% of its staff based in England and 25% based in Scotland, then 25% of the value of the organisation’s levy payments will be paid to Scottish Government.
What is included in the term ‘pay bill’. Does this cover freelancers?
Your pay bill will be based on the total amount of earnings subject to Class 1 secondary (employers) National Insurance Contributions (NICs).
Earnings include anything such as wages, bonuses, commissions, and pension contributions that you pay NICs on.
In summary, it is calculated on what goes through an employer’s PAYE.
If you pay freelancers outside of PAYE (e.g. through invoices) this would not be included as part of your pay bill.
What’s the difference between an apprenticeship, an intern and work experience?
Apprenticeships are recognised formally by the Government. Apprentices must be working to a published and approved Framework or Standard (which includes mandatory off-the-job training delivered by a training provider).
Apprentices by law must have a contract of employment and be paid the appropriate minimum wage rate.
Internships are time limited work opportunities which must be paid (exceptions apply). There is no formal training or accreditation attached to an internship like there is with an apprenticeship. We have separate guidance on what constitutes an appropriate internship opportunity.
Work experience describes short opportunities (usually no longer than two weeks) that allow somebody to observe the work of an organisation and gain some basic experience/understanding of a role and/or workplace. We have separate guidance on work experience.
Our pay bill is below the £3 million threshold – we’re not affected, are we?
In this instance an employer will not be required to pay the apprenticeship levy, but if they employ an apprentice, they will be required to pay 5% of the training costs for the apprenticeship in addition to an apprentice’s wage.
The amount this 5% represents varies depending on the value of the specific apprenticeship (referred to as the Government’s funding band). There are 30 funding bands for apprenticeships which start at £1500 rising to £27,000.
The funding band represents the total amount the Government is prepared to pay to cover the off-the-job training costs of an apprenticeship (including the total levy voucher contribution) and end point assessment costs, which represents anywhere between 10% to 20% of the funding band.
Employers are free to pay above the band for additional training but would incur this cost directly.
How are the payments made? / I heard something about vouchers – what are they? What do we spend them on?
Apprenticeship vouchers are what levy-paying employers will use to buy their apprenticeship training and cover the cost of End Point Assessment. All apprentices in England are assessed at the end of their apprenticeship when their employer deems their apprentice to have reached competence in the occupation they’re training for. When an apprentice passes End Point Assessment they are issued with a certificate of achievement.
Each employer has a digital Apprenticeship Service account, which will hold the value of an employer’s vouchers and allow them to select the training they want to buy.
Vouchers are paid into the employer’s account one month in arrears of the levy payment being made to HMRC via PAYE.
From the point at which the vouchers appear in the employer’s account they have two years to spend them, after which the Government will take them back.
Levy paying employers can pass on up to 25% of the annual value of their levy vouchers to another employer to cover the cost of their apprenticeship training. This is referred to as a ‘levy transfer’ and is managed through the digital Apprenticeship Service. Both the transferring and receiving employers must have an Apprenticeship Service account set up first.
When / how often do the payments leave our Digital Apprenticeship account?
When an employer selects the training they want to buy from an approved training provider listed in the digital Apprenticeship Service, payments will be taken monthly from their account and paid directly to the selected training provider until the end of the apprenticeship.
We already do an apprenticeship scheme, what do we do to make sure it’s counted?
Unless it is a Government recognised apprenticeship, it won’t be counted.
If it is, then you need to pay for the apprenticeship training via your digital Apprenticeship Service account. All employers, levy payers and non-levy payers buy apprenticeship training through the Apprenticeship Service.
How do I get a digital Apprenticeship Service account?
Any employer can set up an Apprenticeship Service account
Does the Levy change how much our apprentices are paid?
No. The levy helps cover the cost of training and end point assessment only.
The employer is still legally obligated to pay their apprentice the appropriate National Minimum Wage rate.
Details of National Minimum Wage rates can be found here.
We are a charity – does that make a difference?
No. Charities are subject to the same arrangements for apprenticeships as any other employer.
Who can we contact to talk to about apprenticeships and the Levy?
The www.gov.uk website contains all current information about apprenticeships and the associated levy in England.
However, we have a role in supporting the sector around apprenticeships and can be approached with any apprenticeship query by contacting email@example.com