Pay cut fears for apprentices

Fears have emerged that government proposals to streamline “difficult” minimum wage rates for apprentices could lead to lower pay.

The Low Pay Commission (LPC) has been asked to look at simplifying the rate for apprentices, which is £2.68-an-hour for those in year one before normal worker minimum rates apply.

A government spokesperson said: “The current system can be difficult for employers to understand, leading to poor compliance. The new remit will look at streamlining
the apprenticeships rate so that apprentices get the minimum wage they are entitled
to.”

The fear is that a simplified system could entail a new minimum rate for all apprentices, with learners no longer moving up after 12 months to the higher rates enjoyed by normal workers.

Toni Pearce, president of the National Union of Students, told FE Week: “It would be completely unacceptable for ministers to let companies off the hook under the guise of simplification with one hand, and then to give them free reign to pay a lower flat rate minimum wage for the duration of an apprenticeship with the other.”

It comes after findings in the apprenticeships pay survey 2012, which came out late last year, showed 29 per cent of learners did not receive the then-legal minimum of £2.65 an-hour in 2012, up from 20 per cent the year before.

Business Secretary Vince Cable said: “I want to see apprentices paid the right wage, so I am asking the LPC to simplify the system to make it easier for employers to know exactly what wage they must pay.”

The apprentice minimum wage is set to rise by 5p an-hour to £2.73 from October and the LPC is due to report to the Prime Minister, the Deputy Prime Minister and Dr Cable in February.

Ms Pearce added: “Although Dr Cable is suggesting that it is not currently easy enough for firms to understand the rules on apprentice pay, in reality the issue is quite simple.

“We need to see both government enforcement to ensure companies obey the law, and moves to close the discriminatory pay gap by adopting an equal minimum wage which is both fair for employees and simple for employers to understand.”

John Allan, national chairman of the Federation of Small Businesses, said: “While minimum wage legislation is already fairly straightforward, simplification of the apprenticeship rate has the potential to help small businesses by reducing some of the complexity of taking on an apprentice.”

A spokesperson for the Confederation of British Industry, whose director for employment and skills, Neil Carberry, has been appointed to the LPC, said: “The LPC is an independent body that will review this issue and make recommendations. We will be consulting our members on this in the coming weeks.”