Government’s new crackdown on illegally low wages for apprentices

Government’s new crackdown on illegally low wages for apprentices

Rogue employers who illegally underpay apprentices have been threatened with severe jail sentences, under a new government crackdown on abuses of workers’ rights.

Sir David Metcalf (pictured above), the government’s new director of labour-market enforcement, today warned that the worst offenders could face prison sentences as long as two years.

The crackdown comes just days after FE Week reported that it was more than likely that no employer had ever been prosecuted or even fined for paying apprentices less the national minimum wage.

A much-delayed Department for Education survey released last week showed that 18 per cent of apprentices were paid illegal wages in 2016, up from 15 per cent in 2014.

Government inaction allowed employers to leave UK apprentices half a million pounds out of pocket in 2015-16 alone.

“Tackling labour market abuses is an important priority for the government and I am encouraged it has committed record funds to cracking down on exploitation,” said Sir David, who was appointed to the new position in January, in order to oversee a crackdown on workplace exploitation.

“Over the coming months I will be working with government enforcement agencies and industry bodies to better identify and punish the most serious and repeat offenders taking advantage of vulnerable workers and honest businesses.”

A Department for Business, Energy, and Industrial Strategy spokesperson confirmed to FE Week that this crackdown commitment would apply to employers who fail to pay apprentices at least the minimum wage of £3.50 per hour for anyone aged 24 or under.

The wider national minimum and living wage enforcement statistics show that in 2016-17, government teams managed to recoup a record £10.9 million in back pay for 98,150 of the UK’s lowest-paid workers – a 69 per cent increase on the previous year.

BEIS said businesses that failed to pay workers at least the legal minimum wage were also fined £3.9 million, with employers in hospitality and retail sectors among the most prolific offenders.

However, there have been just 13 prosecutions since 2007 for minimum wage violations, four of which came in 2016-17.

A BEIS press officer claimed to “not have information” on whether any of these related to underpaid apprentices.

Jon Richards, head of education at Unison, said his union has raised concerns about “weak” regulation of apprentices’ pay‎ with government on “a number of occasions”.

He said that if this new crackdown is true and “not further government spin”, then it “might make employers sit up and take notice”.

“Apprentices are already paid a pittance, so any employer trying to exploit them further deserves what they get,” he added.

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” which break NMW law.

It identified a record 359 breaches that month alone, but continues to refuse to say whether any concerned apprentices.

Five months ago, BEIS announced that employers paying their 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”.

Business minister Margot James claimed the government is “firmly on the side of hard-working people” and is “determined to stamp out any workplace exploitation, from minimum wage abuses to modern slavery”.

Sir David will start consulting with stakeholders from today, ahead of his first full strategy, due later this year. To contribute, you can email directorsoffice@lme.gsi.gov.uk