PRMI Reform View

Reduced mandatory apprenticeship requirement for SMEs to 10% of the workforce
Reform ID		I187
Reform Description		Reduced mandatory apprenticeship requirement for SMEs to 10% of the workforce Before: It was mandatory for all businesses to employ 20% of the workforce as apprentices which meant extra cost to businesses for unskilled employees. After: Now, for the SMEs, mandatory apprenticeship threshold has been reduced to 10% of the workforce.
Sector		All Sectors
Beneficiaries		All Businesses
Jurisdiction/ Location		Islamabad Capital Territory
Department		Labour Department - ICT
Date of Implementation
Details	Difficulty	 The Factories Act, 1934 required that every business had to employ and train apprentices; and the threshold was set to be 20% of total employment.  This was a challenge for SMEs because of their limited resources. SMEs had to bear expenses of un-skilled apprentices who had little to contribute to the efficiency or productivity of business.
	Analysis	The requirement for apprenticeship at a rate of 20% of total employees was an unnecessary burden for SMEs, which required reconsideration.
	Solution	To facilitate SMEs, the threshold of apprenticeship programs under the law has now been reduced from 20% to 10%. This will reduce the financial burden of SMEs and provide them space to hire skilled employees.
Evidence