Exclusive: Government inaction as employers leave apprentices half a million pounds out of pocket

Exclusive: Government inaction as employers leave apprentices half a million pounds out of pocket

It’s likely that no-one has been fined or prosecuted for illegally underpaying apprentices, an FE Week investigation exposing the “unacceptable” failure of government enforcement has found.

The Department for Education’s own survey, published on Wednesday, found that 18 per cent of apprentices were paid below the appropriate national minimum wage in 2016, up from 15 per cent in 2014.

A spokesperson for the Department for Business, Energy, and Industrial Strategy admitted there had been just 13 prosecutions since 2007 for minimum wage violations, four of which were in 2016-17.

However, he claimed to “not have information” as to whether any of these related to apprenticeships.

Meanwhile, in 2015-16, he said the government identified “£558,618 of arrears for 632 workers in cases where complaints involved apprentices”, though this only refers to underpayment claims, which have to be reimbursed, and do not represent fines.

Asked directly whether any employers had been fined or prosecuted for non-compliance over apprentices’ pay, the DfE declined to respond.

It also refused to comment on whether government attempts to deter employers, through naming and shaming, and threats of fines or prosecution, had failed.

The newly elected chair of the education select committee, Robert Halfon, a former skills minister, spoke out on Twitter about government inaction.

“Apprentices not paid legal MinWage unacceptable: Emplyrs shld’ve high sanctions. Apps shld be valued not exploited,” he wrote.

Rebecca Long-Bailey, Labour’s shadow minister for business, energy and industrial strategy, added: “The government has not taken sufficient steps to enforce payment of the minimum wage. Employment rights are only safe in Labour hands.

“That there are apprentices who are paid less than minimum wage is unacceptable, that the practice is on the rise is shocking.”

Julian Gravatt, the deputy CEO of the Association of Colleges, described FE Week’s findings as “a concern”. “Low pay is bad for the apprentice while illegal pay arrangements damage the reputation of apprenticeships,” he said.

“This issue should be a priority for the government’s new director of labour market enforcement.”

The government appointed Sir David Metcalf to this new position in January, to “oversee a crackdown on workplace exploitation”.

BEIS explained in February that “from October 2013, the government revised the naming and shaming scheme to make it simpler to name and shame employers” who break NMW law.

It identified a record 359 breaches that month alone, but continues to refuse to say which, if any, of the offences related to apprentices.

BEIS also explained five months ago that employers who pay workers less than the minimum wage could face prosecution, and “not only have to pay back arrears of wages to the worker at current minimum wage rates, but also face financial penalties of up to 200 per cent of arrears, capped at £20,000 per worker”.

FE Week learned in April that the researchers who carried out the work for this year’s apprentice pay survey handed a final draft of their report to the government back in January.

Mark Winterbotham, the director of the firm which carried out the survey, told FE Week that he didn’t know why it hadn’t yet been published, and said he had “not had any communication since early March” with BEIS’ research team.

“Headline figures on non-compliance for apprenticeship pay have been public since October 2016,” said a spokesperson for the department said this week.

“There has been no delay in publishing this report.”