At a glance
- Recently, several businesses, including technology and information technology enabled services businesses, received communications from the Board of Apprenticeship Training (BOAT) directing them to comply with the Apprentices Act 1961 (Apprentices Act) and Apprenticeship Rules 1992 (Apprenticeship Rules).
- This development highlights the importance of gauging the applicability of the Apprentices Act to a business and engaging apprentices as required under the rules.
Reproduced with the permission of Sonakshi Das at JSA Law.
The Apprentices Act and Apprenticeship Rules provide the legal framework for training apprentices in various trades and industries. Historically, checks under the Apprentices Act and Apprenticeship Rules were targeted at manufacturing industries and factories, and in the technology sector compliance inspections were infrequent. Despite the general perception that the Apprentices Act may not apply to the technology sector, it does however extend to all businesses in notified industries, including data processing, software development and computer consultancy services industries.
Key requirements
Under the Apprenticeship Rules, all establishments employing 30 or more employees are required to engage apprentices to make up between 2.5% to 15% of the total workforce.
Businesses covered by the Apprentices Act are required to register on the portal to engage apprentices and to maintain records of who is undergoing apprenticeship training. A business must also adopt an apprenticeship programme to ensure that the required number of apprentices are retained to meet the notified band for the establishment. Contracts between apprentices and employers must be registered and uploaded to the portal. Apprentices must be engaged for the minimum period prescribed for their apprenticeship category under the rules which ranges from six months to three years.
Apprentices are entitled to be paid a minimum rate. These rates are notified under the Apprenticeship Rules; but range from INR 5000 to INR 9000 depending on what stage the apprentice is at.
Employers must provide apprentices with training themselves or via a qualified third party.
Via the portal, employers must report information and returns in relation to ongoing compliance with the Apprenticeship Act at the end of every quarter.
Penalties
Where an employer fails to engage the required number of apprentices, they can be fined INR 500 for each apprentice shortfall per month, for the first three months. After three months this is extended up to INR1000 until the threshold is met. For other contraventions of the Apprentices Act, penalties may range from INR 1000 to INR 3000.
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