Tax credits
Employers that hire apprentices can claim a tax credit for the time spent training them. This credit is valid for up to three years from the date of the apprentice’s last tax return. In addition, employers that hire First Nations apprentices can claim additional tax credits. In order to qualify for these credits, an employer must hire the apprentice for a full-time position for at least six months.
Tax credits for apprentices are offered by a variety of government agencies. The Massachusetts Department of Labor and Workforce Development offers tax credits to employers who hire an apprentice. The state has established a program to promote apprenticeship expansion in the manufacturing, health care, and technology sectors. Under the program, qualifying employers may claim a tax credit of up to $4,800, or up to 50% of the apprentice’s wage. Rhode Island also offers a similar financial incentive. Another state that provides a tax credit for skills training is Mississippi.
Targeted subsidies
Targeted subsidies for apprentices are a way for employers to support the training of new staff. They can be obtained through the government’s Apprenticeship Australia program, which provides a 50% subsidy on apprentice wages, up to a maximum of $7,000 per quarter. The program’s initial stage cost $1.2 billion, and is fully subscribed. It has helped create 100,000 apprenticeships and assist nearly 40,000 businesses take on new apprentices.
The incentives are conditional: employers receive a reduced tax bill and reduced dismissal costs if they hire apprentices. In addition, these subsidies are meant to target specific occupations to address skills shortages in priority industries. In Australia, for example, incentives are available to target adults, under-represented social groups, and young people with disabilities.
Outweighs the costs
Government incentives for apprentices in Australia are not without costs. They require significant investments of time and resources from employers and their apprentices. Many employers focus on upfront costs and fail to appreciate the potential long-term benefits. But new studies show that the economic benefits of apprenticeship programs can be considerable.
Studies have shown that the productive work of an apprentice far outweighs the costs of training the apprentice. These studies have focused on Swiss and German enterprises. They found that while Swiss firms incur higher training costs than their German counterparts, the value of an apprentice’s productive output exceeds the cost. Over a three-year period, Swiss firms gain an average of CHF 2,739 per apprentice.
Access to first rung of career ladder
In recent years, there has been a resurgence of apprenticeships. Beginning in ancient Egypt and Babylon, artisans trained the next generation to continue their trades. Since then, apprenticeships have spread beyond the trades to include a wide variety of occupations. Through creative partnerships and curriculum development, modern apprenticeships have been rejuvenated. For example, Arapahoe Community College has been developing quality apprenticeship programs for more than four years. It has also assisted colleges across the country in developing their own apprenticeship programs.
Apprenticeships are designed to give people in paid employment the opportunity to acquire nationally recognised skills and occupational standards. By offering apprenticeships, employers help young people develop employability skills early in their careers. Program sponsors can mitigate unconscious bias in hiring by recruiting from a broader pool of talent. They can also establish peer support networks to support apprentices in their early career. They can also encourage existing employees to pursue apprenticeships.
