Not as a substitute. An apprentice under the Apprentices Act 1961 is a trainee on a registered contract, learning a trade to an approved programme, paid a stipend rather than a wage, and capped at 15% of the workforce. The same rules cut the other way: a site with 30 or more workers, counting its contract staff, is required to engage apprentices, so a contract-heavy floor may already be short of them.
What an apprentice is, in law
A trainee, and deliberately not a worker. Section 18 of the Act says it in two lines:
Save as otherwise provided in this Act, (a) every apprentice undergoing apprenticeship training in a designated trade in an establishment shall be trainee and not a worker; and (b) the provisions of any law with respect to labour shall not apply to or in relation to such apprentice.
The Labour Codes carry the same exclusion into their own definitions. The Code on Social Security 2020 defines an employee in section 2(26) as a person employed on wages "other than an apprentice engaged under the Apprentices Act, 1961", which takes an apprentice outside the provident fund, ESI, gratuity and maternity chapters. The OSH Code 2020 uses the same words in its definition of employee at section 2(t).
What the Act does not do is leave an apprentice unprotected. It sets its own terms, and several of them are stricter than the rules for a contract crew.
| Apprentice | Contract worker | |
|---|---|---|
| Status | Trainee, not a worker; labour law does not apply (s.18) | Employee of the contractor, working in the establishment |
| Paid | A stipend at not less than the prescribed minimum (s.13) | Wages under the Code on Wages 2019 |
| PF, ESI, gratuity, maternity | Outside them: excluded from "employee" (Social Security Code s.2(26)) | Inside them, through the contractor |
| Hours | As the employer determines, subject to the training duration (s.15(1)) | Eight a day under the OSH Code, overtime at twice the rate |
| Overtime | Not allowed without the Apprenticeship Adviser's approval, given only in the interest of training or the public interest (s.15(2)) | Allowed with consent, inside the quarterly cap |
| Leave and holidays | Those observed in the establishment (s.15(3)) | Annual leave under OSH Code s.32 |
| Injury | The employer is liable to pay compensation (s.16) | ESI, or the employee's compensation chapter |
| Conduct and discipline | The rules for employees of the corresponding category (s.17) | The contractor's standing orders or service rules |
| After the programme | No obligation to offer a job unless the contract says so (s.22) | Continues for as long as the engagement runs |
How many apprentices, and who counts in the base
A band of 2.5% to 15% of the establishment's total strength, and the total includes contract staff. Section 8(1) leaves the number to the Central Government, and the Apprenticeship Rules 1992 as amended on 25 September 2019 set it as a band "of 2.5% to 15% of the total manpower strength of the establishment including contractual staff", within which 5% is reserved for fresher apprentices and skill-certificate holders. The same 2019 amendment made engagement mandatory for establishments with 30 or more workers, down from 40; it is optional between 4 and 29, and not permitted at 3 or fewer [VERIFY: the band as stated in the Ministry of Skill Development's FAQ; the amended Rules were not opened, and whether the 2025 amendment changed the band was not established].
| Total strength, contract staff included | Minimum apprentices (2.5%) | Maximum apprentices (15%) |
|---|---|---|
| 100 (the Ministry's own example) | 3 | 15 |
| 200 (for instance 60 direct and 140 contract) | 5 | 30 |
The second row is the point for a contract-heavy site. Sixty direct employees, looked at alone, would put the minimum at two. Counting the 140 contract workers the base requires puts it at five. A seasonal ramp that lifts total strength lifts the floor with it.
The shortfall is enforceable. Under section 30(1) and (1A), an employer that engages fewer apprentices than it must is given a month's written notice to explain; if the reply does not satisfy the authorised officer, the fine is ₹500 for each shortfall apprenticeship-month for the first three months and ₹1,000 a month after that until the seats are filled.
What an apprentice costs
A stipend at the prescribed minimum, which was raised in September 2025. The Apprenticeship (Amendment) Rules 2025, notified as G.S.R. 610(E) dated 3 September 2025 and published on 11 September 2025, replaced the 2019 rates with these monthly minimums:
| Apprentice's qualification | Minimum before 11 Sept 2025 | Minimum from 11 Sept 2025 |
|---|---|---|
| School pass-out, class 5 to 9 | ₹5,000 | ₹6,800 |
| School pass-out, class 10 | ₹6,000 | ₹8,200 |
| School pass-out, class 12 | ₹7,000 | ₹9,600 |
| National or State certificate holder | ₹7,000 | ₹9,600 |
| Technician (vocational), vocational certificate, or sandwich course from a diploma institution | ₹7,000 | ₹9,600 |
| Diploma holder, or sandwich course from a degree institution | ₹8,000 | ₹10,900 |
| Graduate or degree apprentice | ₹9,000 | ₹12,300 |
Three details from the Ministry's office memorandum of 15 September 2025 and its clarification of 15 October 2025 matter to payroll. The new rates apply from 11 September 2025 to apprentices already in training on that date, not only to new contracts. The stipend for a month is due by the tenth day of the following month, into the apprentice's bank account. And an employer may pay above the minimum, which the Ministry encourages [VERIFY: whether any revision after G.S.R. 610(E) has been notified].
The Government has also shared part of the cost. Under the NAPS-2 guidelines of 25 August 2023, it paid 25% of the stipend, up to ₹1,500 a month per apprentice, directly into the apprentice's account, with the establishment paying the rest. At the 2025 rates, 25% is above ₹1,500 in every category, so the cap is the figure that applies. The guidelines frame the scheme for financial years 2022-23 to 2025-26, which ended on 31 March 2026 [VERIFY: whether NAPS-2 has been extended or replaced for 2026-27 — do not budget on the ₹1,500 until confirmed].
Why apprentices cannot be your contract crew
Because the law is built around training, not output, and every rule that makes an apprentice cheaper also makes one less flexible.
- They are capped. At 15% of total strength, apprentices can never be most of a crew.
- They cannot absorb a peak. No overtime without the Apprenticeship Adviser's approval (s.15(2)), which is the opposite of what a contingent bench is for.
- They come with a programme. The employer must arrange practical training in the workplace and give the Apprenticeship Adviser access to test the apprentice's work against the approved programme (s.9). The contract of apprenticeship has to be registered online on the apprenticeship portal.
- They are time-limited. A programme runs 6 to 36 months, including basic training, under the 2019 rules.
- They leave at the end. Section 22(1) lets each employer set its own policy on recruiting apprentices who finish, and there is no duty to offer a job unless the contract of apprenticeship includes a service condition (s.22(2)).
Where apprentices and a contract crew fit together
As a pipeline alongside the crew, not a cheaper version of it. The contract workforce carries the flex: the seasonal peak, the second shift, the headcount that has to rise and fall. Apprentices carry the skill that the site will want in two years' time, and the ones who finish well are the obvious first hires when a contract role becomes permanent.
The Act anticipates that smaller employers will not run programmes alone. Section 8(2) lets several employers join together, either themselves or through an agency approved by the Apprenticeship Adviser, to provide apprenticeship training. The obligation stays with each establishment either way, so the practical sequence is the same for everyone: count total strength including the contract crew, work out the 2.5% floor, check what is actually registered on the portal, and recheck after every ramp.
How Velura Services helps
We help sites work out which roles suit apprentices, which suit a contract crew, and which belong on the payroll, then staff the contract share with screened, statutorily enrolled workers. That keeps apprenticeship training separate from production headcount, the way the Act expects.
Sources
- The Apprentices Act, 1961 (Act 52 of 1961), as amended by Act 29 of 2014, copy hosted by the Board of Apprenticeship Training (Western Region), Ministry of Education — s.8 (number of apprentices; joint training through an approved agency), s.9 (practical training and access for the Apprenticeship Adviser), s.13 (stipend), s.15 (hours, overtime, leave), s.16 (compensation for injury), s.17 (conduct), s.18 (trainee, not worker), s.22 (offer of employment), s.30 (penalty for shortfall). Opened and read.
- Ministry of Skill Development and Entrepreneurship, FAQs on apprenticeship under the Apprentices Act, 1961 — the 2.5% to 15% band including contractual staff, the 30-worker mandate, the 2019 amendments to the Apprenticeship Rules 1992, programme duration. Opened and read; the document dates from around May 2020.
- MSDE Office Memorandum No. DGT-36/1/2021-AP dated 15 September 2025, and clarification dated 15 October 2025 — revised minimum stipends under the Apprenticeship (Amendment) Rules 2025, G.S.R. 610(E) dated 3 September 2025, published 11 September 2025; application to apprentices in training; payment by the tenth of the following month. Opened and read.
- National Apprenticeship Promotion Scheme 2.0 guidelines, 25 August 2023 — Government support of 25% of stipend up to ₹1,500 a month by direct benefit transfer; scheme period FY 2022-23 to FY 2025-26. Opened and read.
- The Code on Social Security, 2020, s.2(26) and the Occupational Safety, Health and Working Conditions Code, 2020, s.2(t) — apprentices engaged under the Apprentices Act excluded from "employee". Opened and read.