An update on funding Apprenticeship Costs

Employing an apprentice has many rewards, including investing in a person’s new career; creating loyal employees; and (provided the criteria are met) paying a lower wage and receiving government funding.  However, we have seen a few cases recently of discussions between training providers and employers around repayment of the apprenticeship costs.  In this article, we consider where the liability for those costs may end up.

Arranging apprenticeships

Apprenticeships are arranged through an apprenticeship training provider.  This training provider will work with the employer and the apprentice to provide training, support and guidance during the apprenticeship.  The training provider will incur costs for training and assessments with the apprentice.  We’ll call these the “Apprenticeship Costs”.

When arranging the apprenticeship, the employer, apprentice and the training provider will agree a Commitment Statement, which sets out the plan for the apprenticeship.  The employer and the training provider will also agree a total price for the Apprenticeship Costs.  They may discuss who will ultimately pay for these Apprenticeship Costs, particularly if the apprentice fails to complete the apprenticeship or any of the agreed training.

Reclaiming costs?

We’ve become aware of a few instances where training providers have advised employers that they can agree with the apprentice that, should they fail to attend a training session or fail to complete the apprenticeship, the apprentice will repay some or all of the Apprenticeship Costs to the employer.  The training provider then wants to agree that the employer, in turn, will repay these Apprenticeship Costs to the training provider.

However, it is important to note that employers are not entitled to reclaim any Apprenticeship Costs from the apprentice themselves, even if they leave the programme early.  Any agreement with the apprentice that they will repay Apprenticeship Costs is unlawful and cannot be relied on.

Therefore, if you as an employer find yourself in a situation where a training provider is insisting that you should repay Apprenticeship Costs to the training provider in certain circumstances (e.g. if the apprentice resigns), these Apprenticeship Costs would have to be funded solely by you as the employer.  They cannot be passed on to the apprentice.  In such a situation, we would advise seeing if you can find an alternative training provider, whose agreement does not make you liable for any Apprenticeship Costs.

Apprenticeship questions? Talk to Citation…

If you’re a Citation client and have any questions about working with apprentices, please contact our advice line 0345 844 4848. Our experts are here for you 24/7.

If you’re not a client and would like to find out more about how we could support you with HR & Employment Law, get in touch using the form on this page.

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