Threshold of Mandatory Apprenticeship Programme decreased for SMEs

 Reform Description Requirement of Mandatory Apprenticeship Programme for SMEs brought down to 10% of Total 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  Punjab
Department  Labour & Human Resource Department , Punjab
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 programmes 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.

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