Apprentices - What Counts As The 1st Year?

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UKSBD

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    the gist was to phone HMRC to check, It may be seen that they had done there time but ultimately it's the employers choice.

    Surely there must be an official answer and it can't be left for the employer to decide when the difference is £3.50 an hour or £7.05

    Imagine a company is employing apprentices assuming it is their 1st year but it is in fact their 2nd year, they could end with a wage bill being doubled.
     
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    UKSBD

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    The answer you find, or lack of answer you find, could be a big news story.

    I'm surprised not to have read anything about this before.

    There must be thousands of apprentices out there who may be being paid the wrong amount and likewise thousands of businesses paying the wrong amount.

    If it is confirmed that a person doing a 2nd year of apprenticeship at a different company is entitled to NMW and the company has only being paying them an apprenticeship wage you are potentially looking at £millions

    This is a story that should get picked up by the Nationals.
     
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    godoit

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    Ok, So got off the phone to ACAS. My initial thoughts were correct, with the addition of you could even do a new apprenticeship (with training wage) within the same company as long as its a new agreement and different qualification, ie level 2 to 3 or business admin to childcare.

    So to summarise
    If an apprentice is under a new apprenticeship contract then it is classed as a new apprenticeship and falls under the training wage (or your choice of wage) for the first 12 months.

    That was a fun one to get some clarity.
     
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    godoit

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    appears to be. doesn't sound great for the unscrupulous, once you have an employee over a year, you should know if they are a good or not.

    on the flip side it takes 2 years to add value to the company then it could be
    year 1 £3.50
    year 2 £5.50
    year 3 (value add) £9

    I just want to add we never pay the min wage always above 3.50
     
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    n_s_simpson

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    Okay, I've also carried out lots of research today about this and it's shocking how little even the training providers know about the legislation. Some say one thing and others say another. The college I've been working with at least admitted that they weren't sure. Half of the problem is that the government implement things without providing full clarification. So where to start...

    Okay, so I phoned up Education and Skills Funding Agency expecting them to know. The chap I spoke to went away, then came back and said that the wording in unclear so he would have to raise an "Incident" ticket so they can investigate. I should therefore expect clarification within 5 working days.

    I then called ACAS and the chap I spoke to was adamant that a 19+ year old that's done an NVQ Level 2 can go onto an NVQ Level 3 and still be paid £3.50/hr because it'll be classed as their 1st year within that apprenticeship. I have recorded this call in case it turns out to be wrong and we get taken to a tribunal.

    I would have expected the ESFA to know more about this than ACAS but there you go.

    In terms of costing, if a 19+ year old doing a second NVQ could demand NMW there would be absolutely no point in an employer taking that person on because the cost benefits aren't there:

    1. Small employers now have to pay 10% "co-investment" to take on a 19+ years old apprentice.
    2. Regardless of age, the employer has to pay them for 5 working days but only gets them for 4 due to "off-job training".
    3. The employer grant has been reduced from £1500 to £1000 (GM AGE has extended the £1500 to end of July).
    4. The additional £1000 an employer could claim for providing an Advanced (i.e NVQ Level 3) or Higher (i.e. Degree) apprenticeship has now been restricted to Higher apprenticeships only.

    Where is the logic? I've wasted most of today looking into this and I'm still not convinced I have the correct answers.
     
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    Newchodge

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    Okay, I've also carried out lots of research today about this and it's shocking how little even the training providers know about the legislation. Some say one thing and others say another. The college I've been working with at least admitted that they weren't sure. Half of the problem is that the government implement things without providing full clarification. So where to start...

    Okay, so I phoned up Education and Skills Funding Agency expecting them to know. The chap I spoke to went away, then came back and said that the wording in unclear so he would have to raise an "Incident" ticket so they can investigate. I should therefore expect clarification within 5 working days.

    I then called ACAS and the chap I spoke to was adamant that a 19+ year old that's done an NVQ Level 2 can go onto an NVQ Level 3 and still be paid £3.50/hr because it'll be classed as their 1st year within that apprenticeship. I have recorded this call in case it turns out to be wrong and we get taken to a tribunal.

    I would have expected the ESFA to know more about this than ACAS but there you go.

    In terms of costing, if a 19+ year old doing a second NVQ could demand NMW there would be absolutely no point in an employer taking that person on because the cost benefits aren't there:

    1. Small employer now has to pay 10% "co-investment" for the apprenticeship.
    2. The employer has to pay them for 5 working days but only gets them for 4 due to "off-job training".
    3. The employer grant has been reduced from £1500 to £1000 (GM AGE has extended the £1500 to end of July).
    4. The additional £1000 an employer could claim for providing an Advanced (i.e NVQ Level 3) or Higher (i.e. Degree) apprenticeship has now been restricted to Higher apprenticeships only.

    Where is the logic? I've wasted most of today looking into this and I'm still not convinced I have the correct answers.

    Your error is in assuming that a policy that has evolved on the hoof is logical:

    We should have a national Minimum Wage.

    YAY we have a national minimum wage.

    But should it be paid to people who aren't experienced enough to do a full job?

    Hmm, let's put in age levels for different rates, let's say the full rate is only payable to those over 21.

    Great, what about under 18's?

    OK, lower rate for under 18's compared to 18-22 year olds.

    22 year olds? That's a bit weird.

    Ah, when we said over 21 we meant after their 21st birthday, not 22 year olds.

    Right, so you meant full minimum wage for 21 year olds and over.

    That's it, we've got it straight now.

    Hang on, we've got a different government and they think it's best to call it a National LIVING wage, but it should only be paid to those who are 25.

    Great so anyone who is 25 or over and in a full time job will be paid enough to live on.

    No, we never said it was enough to live on, we just needed a new name and chose that one.

    What about apprentices? An apprentice can't be worth as much as a proper employee, surely?

    You're right. Different rate for apprentices.

    But these days someone can be greatly experienced in the workplace, for example as a steel worker, but needs to retrain because their industry has died and they need to retrain. While they are apprentices in the sense of needing to learn the new skill they offer a huge amount in the workplace.

    OK, if they are over 19 they only get the apprentice rate in their first apprentice year.

    How many first apprentice years can an individual have?

    AAARRGGGGHHHHHHHHHHH
     
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    n_s_simpson

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    I'm cracking up :)

    A bit of an aside from my original post but I have to reiterate that the government are very crafty saying that we now only get access to our apprentices for 80% of the time we pay them for. In actual fact this means that we're paying them 25% more than whatever rate we offer. For those that struggle with percentages it's a bit hard to explain but here goes...

    So let's assume we pay an apprentice £4 an hour. We can now only expect them to work 4 out of every 5 hours we pay them for! This means they will get £20 for 4 hours work, or £5 an hour. £4 + 25% is £5. I hope that makes sense.

    Also offering an NVQ Level 3 apprenticeship when there's hardly any financial incentive means that many employers are needlessly helping people improve their skills and therefore helping them to demand more money or face the risk of them finding a better paid job elsewhere.

    It's horrible to say this but it's just a fact that we'll be shooting ourselves in the foot.
     
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    Newchodge

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    I'm cracking up :)

    A bit of an aside from my original post but I have to reiterate that the government are very crafty saying that we now only get access to our apprentices for 80% of the time we pay them for. In actual fact this means that we're paying them 25% more than whatever rate we offer. For those that struggle with percentages it's a bit hard to explain but here goes...

    So let's assume we pay an apprentice £4 an hour. We can now only expect them to work 4 out of every 5 hours we pay them for! This means they will get £20 for 4 hours work, or £5 an hour. £4 + 25% is £5. I hope that makes sense.

    It makes sense.

    Glad you liked my scenario above - it is actually accurate in the sense of many changes in the legislation - there was a period when the rate paid to 'adults' was only paid to those aged 22 and over, although it did eventually get changed.

    The proper answer to your question, I fear, is that there is no proper answer, because no one ever thought it may be an issue. So the legislation does not cover it, so it will only be decided if someone takes it to court. The only person who could take it to court would be an apprentice in the first year of their second apprenticeship who wanted, but didn't get, full wages. They would have to have the commitment and the money, or the backing to take it to an employment tribunal. Whoever lost that case would have to have the commitment and the money, or the backing to take it to the Employment Appeals Tribunal.

    Only then would it be certain what the entitlement is. Unless, of course, the losing party had the commitment and the money, or the backing to take it to the Court of Appeal.

    Many employers may take the easy way out and not offer an apprenticeship to someone who had previously had one. Which would be a shame.
     
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    UKSBD

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    So let's assume we pay an apprentice £4 an hour. We can now only expect them to work 4 out of every 5 hours we pay them for! This means they will get £20 for 4 hours work, or £5 an hour. £4 + 25% is £5. I hope that makes sense.

    Plus you will have to pay 10% of what the provider is charging for that hour :)
     
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    UKSBD

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    I didn't mean literally but id the course provider is charging £4,000 in total it's basically for setting the course up and paying for when the employee is with them.

    If you have to pay 10% of this (plus assessment at end of year) it effectively means you are paying 10% on top of the hourly rate when they are in college.
     
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    n_s_simpson

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    Well the two training providers I spoke to said there is no additional costs because they don't actually offer any classroom or onsite training so the apprentice has to simply work through the emailed work they send out.

    A training provider we used previously did actually send out trainers once every few weeks to work with the apprentices. They also had a teacher at their premises that ran daily workshops. They gave each employer a timetable and allowed us to have 3 free workshops each quarter. For a small charge we could pay to send the apprentice on additional workshops. This is what I expected every provider to offer for the money they get from the government (and now the employer too). I am waiting to hear back from the college because I imagine that they do something similar.
     
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    Newchodge

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    It is wise to choose a training provider sensibly. Many are less principled about ensuring proper training than about ensuring their income. Is yours the type of role that can be 'trained' by an individual working through emailed work, and without individual input from a trainer?
     
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    UKSBD

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    Well the two training providers I spoke to said there is no additional costs because they don't actually offer any classroom or onsite training so the apprentice has to simply work through the emailed work they send out.

    If it's the same ones you asked about the 2nd year you need to take their answer with a pinch of salt.

    You need to find out what the training provider charge the government as it looks like you will be charged 10% of that. Also the £1,000 incentive is only available to 16 18 year olds.

    Source: https://www.citb.co.uk/documents/levy/apprenticeship_levy_funding_guide.pdf

    Note: that is CITB so may only apply to construction industry.

    Like you say utter ****storm :)
    Good luck - you need it.
     
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    n_s_simpson

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    Hi again, yes we will have to pay 10% of the apprenticeship because the apprentice is 19+ years old.

    In Manchester £1500 is available for 16-24 year olds until end of July. I can't provide the link because I haven't done 30 posts on here yet. If you search for GM AGE you should see the article showing that it's been extended.
     
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