Illegal apprenticeship wages on the rise

Almost a fifth of level 2 and 3 apprentices are being paid below the national minimum wage – as the new Apprenticeship Pay Survey has revealed a 1 per cent rise in “non-compliance”.

Published this afternoon, the survey for 2018/19 says 19 per cent have reported being paid below that level; which is a slight increase on the 18 per cent rate from the last survey in 2017.

But the report notes that the lowest minimum wage rate for apprentices increased from £3.30 from the time of the last survey, October 2015, to £3.70 by the time of this most recent survey.

Non-compliance at levels 2 and 3 was higher than average in hairdressing, 48 per cent, and lowest on management apprenticeships, seven per cent.

But the problem does show signs of improving: the survey reports those nearer the beginning of their apprenticeship were less likely to receive non-compliant pay as only 12 per cent were paid less than the appropriate minimum wage; compared to 25 per cent of those who had been on their course for more than a year.

The problem was felt less at the higher levels: 91 per cent of level 4 apprentices had compliant pay, compared to 81 per cent of level 2 and 3 apprentices.

Among level 2 and Level 3 apprentices in England, the median basic pay was £6.95 an hour, and the mean £7.64.

The national apprentice minimum wage is currently set at £3.90 per hour, but it will shoot up by 6.4 per cent to £4.15 from 1 April.

Association of Employment and Learning Providers chief policy officer Simon Ashworth said: “We encourage providers to make sure that employers are aware of the yearly increases in the NMW for apprentices and these latest figures show that a renewed effort is required to lessen the level of non-compliance especially for apprentices over 19 where with standards and end point assessment, the programme length is now longer than just a year.

“Overall employers show that they really value what their apprentices bring to a business, including at the lower levels, by paying them just about double the legal minimum. If migratory controls come in after Brexit, we anticipate that a tightening labour market might drive apprentice wages still higher.”

A government spokesperson said: “Everyone who is entitled to the National Minimum Wage, including apprentices, should receive it.

“All businesses, irrespective of size or sector, must pay the correct minimum wage to their staff, so we won’t hesitate to take action against those who fail to do so.

“That’s why we’ve more than doubled the budget for enforcement and compliance of the National Minimum Wage for this year, with HMRC having identified over a record £24 million in unpaid wages for 220,000 workers last year.”

The full survey can be found here.