Government ‘not doing enough’ over apprentice illegal wage investigations

Just five per cent of complaints made over the summer about bosses paying apprentices below the National Minimum Wage (NMW) had been fully investigated by the government by late last month, FE Week can reveal.

Eight of the complaints, all registered between July and September, had been closed, prompting a scathing attack from Shadow Skills Minister Liam Byrne.

He said: “The government isn’t doing enough to deal with complaints.

“It is simply appalling that HMRC [Her Majesty’s Revenue and Customs] has closed only five per cent of cases where apprentices have complained about their pay.

“We need a radical overhaul of the system, to ensure apprenticeships are a gold standard once again.

“The apprenticeship brand has been badly tarnished on this government’s watch.”

The complaints situation emerged following an enquiry by Labour peer Lord Beecham with the Department for Business, Innovation and Skills (BIS), asking what steps were being taken to enforce the NMW for apprentices.

Of the complaints investigated, BIS said that four apprentices were found to have been paid below the NMW, which went up 3p to £2.68 last month. They were owed £7,235 in total.

And Mr Byrne went on to point to government research that had shown 29 per cent of apprentices received less pay than they were legally entitled to.

But Business Minister Lord Younger defended the government’s record on investigating apprentices’ pay complaints.

He said: “The government is absolutely clear everyone who is entitled to the NMW should receive it. This includes apprentices.

“The government takes the enforcement of the national minimum wage very seriously and HMRC reviews every complaint that’s referred to it — investigating the complaint and, in addition, carrying out targeted enforcement where it identifies a high risk of non-payment.”

He added the government was so concerned about the issue that complaints from apprentices were now being “prioritised” by HMRC.

“We are also stepping up our communication activity to increase the level of awareness of the minimum wage rules across the board, including apprentices,” he said.

“We want to help employers avoid falling foul of NMW rules unwittingly and ensure individuals are well-informed about their NMW eligibility.”

Meanwhile, the government is yet to name and shame any underpaying apprentice bosses despite moves in the summer to make it easier to identify offending employers.

The clampdown, which applies to non-apprentices too, came into effect last month.

It comes in addition to financial penalties, of up to £5,000, employers face if they fail to pay adequately.

A BIS spokesperson said: “The revised NMW naming scheme will name employers that have been issued with a notice of underpayment by HMRC.

“It can take an average of 150 days for HMRC to complete its investigations before it issues a notice.

“The revised naming scheme came into effect on October 1, so an investigation that began on this date is not likely to be closed until early next year, as this will also have to factor in the appeals and representation process as part of the naming scheme.”

Originally, employers had to meet one of seven criteria before they could be named.

The minimum amount of NMW owed to workers had to be at least £2,000 and the average per worker at least £500 before an employer could be referred to BIS from HMRC for naming. The revised scheme removes these restrictions.