Apprenticeship levy
Since April 2017, employers in England with a pay bill of more than £3 million have been required to pay an apprenticeship levy. The funds are held in a digital account with the Apprenticeship Service. Funds can only be spent on apprenticeship training, with the government adding an additional 10%. The government’s funding rules for all employers, levy-paying or non-levy paying, changed in May 2017. For more information, visit the Educational and Skills Funding Agency website: www.gov.uk/guidance/employing-anapprentice-technical-guide-for-employers.
Government fee retention
The government pays 80% of the funding direct to the University from your digital account in equal monthly instalments according to the duration of the apprenticeship. When the apprentice has undertaken all the learning activity relevant to the apprenticeship, including taking the end-point assessment, the government pays the remaining 20% balance (up to the maximum value of the funding band) direct to the University.
Smaller employers
Employers with a pay bill of £3 million or less do not pay the levy but can access government funding, known as co-investment. See the next paragraph for details.
Employer/government co-investment
Where apprenticeship training is not funded from the employer’s digital account (non-levy-paying employers, and levy-paying employers with insufficient funds), employers will need to pay 10% of the agreed training cost up to the maximum value of the funding band, with the government paying the remaining 90% (known as co-investment). Where the cost of the apprenticeship is above the funding band, employers will need to pay 100% of the difference.
Additional payments
The government will make extra payments to employers to cover additional costs associated with training, if the apprentice is:
- aged between 16 and 18 years old; or
- aged between 19 and 24 years old and has either an Education, Health and Care (EHC) plan provided by their local authority or has been in the care of their local authority.
Extra support for small employers
The government will fund all the apprenticeship training costs, up to the maximum value of the funding band, for employers with fewer than 50 staff. This only applies if, on the first day of the apprenticeship, the apprentice is:
- aged between 16 and 18; or
- aged between 19 and 24 years old and has either an EHC plan provided by their local authority or has been in the care of their local authority.
Wages and benefits
All apprentices must receive the same benefits as other employees and must be an employee on their first day of their apprenticeship, having signed an employee/employer contract. They must also be paid at least the minimum apprenticeship wage consistent with the law for the time they are in work and in off-the-job training. After the first 12 months, apprentices aged 19 and over should be paid the National Minimum Wage for their age group. The rates are updated in October each year. For further information, go to: www.gov.uk/national-minimum-wage