Apprenticeship Act 1961

The Government of India has taken several initiatives to promote skill development. One such initiative was creating the Apprenticeship Act 1961. The Act was formed to provide training to qualified workforce in various trades and promote new skilled manpower.

The Act aims to serve as a connector between potential employees and the employer. It is, therefore, an opportunity for all stakeholders in the employment market further the employer/apprentice requirements.

As per the Act,

1. All the establishments having workforce (regular and contract employees) of 30 or more are mandated to engage apprentices to undertake Apprenticeship Programmes in a range from 2.5% -15% of their workforce (including contractual employees) every year.

2. There is no geographic limitation to the Act.

3. The enterprises are not restricted to only engaging only engineers or IIT students. Students above Class V can also be taken as apprentices.

4. The company can decide everything related to the apprenticeship program of their company, from the training and designing to the recruitment. However, they need to ensure compliance with the Apprenticeship Act and Apprenticeship Laws.

5. As the apprentices do not come under the purview of the Labour Law, the employer is not required to provide EPF and ESI to the apprentice. Instead, they have to pay a minimum stipend of Rs.5000 to 9000 depending on the qualification of the apprentice.

While the 2019 amendment has made the Act a convenient and flexible tool for employers to engage the right talent for the job, there is still a disconnect between the enterprises and potential talent pool due to lack of knowledge. With the correct guidance and implementation of the Act, employers can retain shop-floor ready talent, gain loyal employees and improve the retention rate of their organisation.

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