Apprenticeship

Quick Summary

An apprenticeship is a “learn while you earn” program where a person is trained on the job to become an expert in a specific trade or skill. It is a formal, long-term commitment that combines practical work at your office or factory with a bit of classroom learning.

What is an Apprenticeship?

An apprenticeship is a formal contract between a company and a learner. While it is often confused with an internship, they are quite different. An internship is usually a short-term, exploratory “peek” into a career (often 1–6months). An apprenticeship, however, is a deeper dive that usually lasts between 6 months and 3 years.

The goal of an apprenticeship is to turn a student or a fresher into a job-ready professional. In India, this is governed by the Apprentices Act of 1961. In 2026, the focus has shifted toward making these programs highly digital and industry-focused through the NAPS-2 (National Apprenticeship Promotion Scheme).

Why Apprenticeships Matter for Your Team

Hiring apprentices isn’t just about fulfilling a legal requirement; it’s a smart business strategy:

• Build Your Own Talent: Instead of fighting over expensive “ready-made” talent in the market, you can train people to work exactly the way your company needs.
• Lower Hiring Costs: Apprentices are paid a stipend rather than a full salary. Plus, the government often shares a portion of this cost, making it a budget-friendly way to scale your team.
• Higher Retention: People who start as apprentices often stay with the company much longer because they feel a sense of loyalty to the place that trained them.
• CSR and Social Impact: Engaging apprentices helps solve the national skill gap, which looks great for your company’s social responsibility profile.

Key Components of the Program

To run a successful program, you need to manage these four pillars:

• The Contract: Every apprentice must have a contract registered on the government’s apprenticeship portal. This isn’t a standard employment contract; it’s a training agreement.
• The Stipend: You don’t pay “wages”; you pay a “stipend.” This amount increases every year (typically a 10% increase in the second year and 15% in the third).
• On-the-Job Training (OJT): This is where they spend most of their time (about 70-80%) actually doing the work under the eye of a mentor.
• Basic Training (BTP): This is the “classroom” part. If you don’t have an in-house training center, you can partner with an outside provider to handle the theory.

2026 Legal Compliance & NAPS 2.0

Under the latest Apprenticeship (Amendment) Rules, 2025, which are now in full effect, here is what HR needs to know:

1. The Mandatory Rule: If your company has 30 or more employees (including contractors), you are legally required to hire apprentices. You must fill between 2.5% and 15% of your total workforce with them.
2. Direct Benefit Transfer (DBT): The government has simplified the money part. Under NAPS-2, the government pays 25% of the stipend (up to ₹1,500 per month) directly to the apprentice’s bank account. You only pay the remaining balance.
3. Degree Apprenticeships: There is a new push to link these programs with college degrees. This means you can hire students who are studying and working at the same time to earn their degree.

Best Practices for HR Teams

• Assign a Mentor: Don’t just give them a desk. Assign an experienced team member to guide them. It makes the difference between a productive worker and a confused one.
• Focus on Absorption: Always treat your apprentices as “future employees.” If they see a clear path to a full-time job, their productivity will be much higher.
• Update the NAPS Portal Regularly: Ensure their attendance and stipend details are updated monthly. This is crucial for getting the government’s portion of the stipend on time.
• Rotational Training: If possible, let them work in different departments for a few months. It gives them a broader view of the business and helps you see where they fit best.

FAQs