Could you benefit from the Government's youth unemployment package by taking on apprentices? Legal expert Emilie Bennetts explains how to offer valuable internships without being accused of taking advantage
The recent unveiling of the Government's £1b youth unemployment package has provided welcome news for young jobseekers. The "youth contract" was announced at a time when youth unemployment has hit a record high, with more than one million young people now out of work in the UK, and applicants far outweighing the number of entry-level and graduate vacancies.
Will an increase in apprenticeships and work experience placements benefit employers and young people looking for permanent employment?
From April 2012, as part of the "youth contract" initiative, a £50m programme will help the 25,000 16- and 17-year-olds not in employment, education or training to find work or an apprenticeship. The Government will also provide 250,000 eight-week work experience placements to 18- to 24-year-olds who have been seeking work for three months or more.
The biggest obstacle for unemployed young people is often their perceived lack of experience. Apprenticeships and work experience placements can help by giving young people experience of the workplace as soon as possible.
Apprenticeships Apprenticeships allow people to earn a wage while working towards a nationally recognised qualification and learning essential skills in their sector through hands-on experience.
Taking on apprentices can make good business sense for employers, even in the current economic climate. Apprentices learn while working, so it can be a cost-effective way of training staff in the particular skills that businesses need, particularly as the Government will contribute the costs of training.
Apprentices tend to be motivated, flexible and loyal to their employer, thus helping to minimise staff turnover and adressing skills shortages.
However, while the number of apprenticeships is growing, the schemes may not be going to the people who need them most. The Institute for Public Policy Research found that only 37,000 of the 126,000 extra apprenticeships created last year went to people aged between 16 and 24, with a 257% rise in apprenticeships for workers aged over 25.
The "youth contract" will attempt to readdress this balance in providing more apprenticeships for school leavers.
Work Experience Work experience placements and internships have become increasingly in demand as young people compete for the slightest edge on their CV. However, unpaid placements can be seen as a source of cheap labour which exploit young people desperate to gain relevant experience in their chosen career.
For employers, offering unpaid internships can expose them to claims by "volunteers" that they are actually employees and accordingly owed a wage. If employers feel forced to pay interns, they may decide not to offer these valuable opportunities at all. Plus, if a young person fails to complete a placement under the "youth contract", they will be refused benefits, which will add to the pressure on young people to accept any quality of placement.
It is undeniable that quality work experience allows young people to improve their employability and understanding of the realities of working life, while employers benefit from their enthusiasm and freshness of approach. Providing structured placements with "real work" is essential so that it is valuable for both parties.
â- Plan ahead so young people are given meaningful tasks during work experience placements.
â- To minimise the chances that unpaid volunteers are deemed employees - and therefore entitled to the National Minimum Wage (NMW) - draft a volunteer agreement, only reimburse expenses which match receipts and allow flexibility to minimise obligations on volunteers.
â- Consider offering a nominal sum to individuals for work experience - for example, £100 per week - which will be under the tax and national insurance thresholds, thus minimising the cost to the employer and increasing the number and quality of applicants.
â- Employers must pay at least the NMW for apprentices - currently £2.60 per hour. However, apprentices who are 19 or over and have completed the first year of their apprenticeship must be paid at least the NMW rate for their age.
â- NAS will cover up to 100% of the training costs of apprentices aged 16-18, and up to 50% of the training costs for those aged 19-24. If an apprentice is 25 or over, only selected places will receive a training contribution.
â- Be careful not to create an employment relationship with unpaid interns, for example, by placing obligations on them to work at specific times and making payments in excess of reimbursing expenses.
â- If volunteers are simply work shadowing or observing, they will not be entitled to receive NMW because they will not be performing any work.
Emilie Bennetts is a solicitor at Charles Russellemilie.firstname.lastname@example.org