Rise in apprentices risks bills of £39.2million for UK business

The reported seven per cent rise in apprenticeships in 2009 could end up costing small businesses as much as £39.2 million as a result of legislative confusion, according to our estimates at Coverzones.com.

While the new apprenticeships support figures which show unemployment dropped last month, the Government  could be encouraging SMEs into a legal minefield if such businesses are unaware of the legislative requirements of taking on new apprentices.

Every one of the 15,695 new apprenticeships created in 2009, businesses must be covered by an employer’s liability policy. If not the business could end up being fined £2,500 each day that they remain uninsured.

From my perspective, while the rise in apprenticeships is of course very encouraging news, not clarifying the legal implications of taking on trainee staff, including apprentices, could lead to problems for small companies.

For a self-employed plumber, taking on an apprentice might seem like a great idea but many may be unaware that they must be covered. Were the apprentice to be injured, the plumber could be facing criminal charges by the HSE and a fine in excess of £2,500 per day. Potentially even a jail term. Not to mention the cost of the claim for the accident from the injured apprentice.

In our experience, as many as 50% of small businesses are not aware that apprentices or temporary workers come under the same legal classification as full-time employees. A message the government is doing conspicuously little to communicate.

Smaller companies should be applauded for their support of young people and development of practical skills; however Government bursaries and incentives would not be enough to cover the cost of any accidents. What small businesses need now is greater guidance on their legal obligations, to ensure that the economy and the apprenticeship schemes continue to flourish.