The Law Society has published guidance for firms ahead of the apprenticeship levy, which may require some larger practices to pay out 0.5% of their payrolls to fund training schemes.
Announced in November, the levy will be imposed on businesses in England with wage bills of more than £3m a year. According to the Society’s guidance from May this year, levy-paying employers will pay their contributions monthly to HM Revenue and Customs via the PAYE system. The government will top up these payments, multiplied by the proportion of the salary bill paid to their workforce living in England, by an extra 10%.
Some £15,000 will be deducted from each business's annual contribution.
The money will go directly into an employer’s digital account. Employers will then pay 100% of the cost of training their apprentices from their account. A genuine job must be available at the end of the apprenticeship.
The government said it wants the scheme to help fund three million apprenticeships by 2020.
This funding can be spent only on training, education and assessment, including the end-point assessment, and is not to be used for wages or incidental costs, such as travel.
Chancery Lane says it is in favour of apprenticeships in the legal sector provided they meet the ‘same high standards’ as the current route.
In the legal profession, apprentices are split into three different funding bands.
- Paralegal: £9,000
- Chartered Legal Executive: £12,000
- Solicitor: £21,000
Employers that do not pay the levy will have to pay 10% of the cost of training their apprentices while the government will pay the remaining 90%.
For example, an employer that does not pay the levy may agree with a training provider to pay £10,400 to train a paralegal. The employer will have to cover all agreed costs over and above the upper limit of the funding band.
However, this could prove problematic for employers that will pay trainees significantly above the banded levels.
The guidance states that the government will withhold 20% of the total price for training and assessment, including end-point assessment, until the apprentice completes the programme.
The Society said it is keen to find out more about the level of interest in legal apprenticeships and how the Law Society could be helping members. To give feedback contact: firstname.lastname@example.org.