Getting a fair deal for apprentices

29 November 2017

As part of last week’s Budget, the Chancellor accepted the recommendations from the independent Low Pay Commission and announced an increase in the national minimum wage for apprentices from £3.50 to £3.70 per hour from April – the second increase this year.

For apprentices on the minimum wage, this rate increase of 5.7%, much greater than most other workers are set to receive, will be extremely welcome. It is widely recognised that apprentices are often paid a lower wage to reflect the investment their employer is making in their training, from which they will benefit throughout their career. However, it is also important to acknowledge that undertaking an apprenticeship needs to be financially viable now; and this can be a particular challenge for those living independently and/or with caring responsibilities. Calculations made by the Living Wage Foundation, in accordance with the true cost of living, suggests that the minimum that people need to live on is £10.20 per hour in London and £8.75 per hour elsewhere across the UK.

However, as research released by Learning and Work Institute this week shows, one in five employers of apprentices are unaware of the rules around apprentice pay. And of course, any increase can only benefit those whose employers are aware of, and stick to the rules.

Our survey of more than 2,000 employers showed that one in five employers (22%) have not heard of the minimum wage for apprentices; 54% did not know an apprenticeship required a minimum of 20% of the job training and 43% were unaware that time spend in off-the-job training needs to be paid. Of greater concern however, was the lack of awareness among those who employ apprentices, where:

  • nearly one-quarter (24%) were unaware that the minimum rate of pay for apprentices aged 19+ increases after the first year of their apprenticeship;
  • nearly one-third (32%) were unaware that an apprenticeship required at least 20% off-the-job training; and
  • nearly one-quarter (23%) were unaware that off-the-job training should be paid as part of an apprentice’s contracted hours of employment.

Employers told us that they are most likely to get information on apprentice pay rules from their HR staff where they have them, from government websites and from education and training providers. This suggests that training providers should play a greater role in ensuring that both employers and apprentices are clear upfront about the rules and how they will change throughout the apprenticeship. While employers are responsible for ensuring compliance with the rules, providers have a key part to play in helping boost awareness.

In partnership with the National Society for Apprentices, we also sought the view of apprentices on the issue of apprentice pay. While a number said that they would be willing and able to challenge non-compliance, concerns were also expressed that this may have repercussions, such as not being kept on or being overlooked for progression opportunities. Our research therefore also recommends that Government should make improving awareness of the wage rule for apprenticeships a priority, and that it should also take a proactive approach in enforcing apprentices’ rights.

While we welcome the Government’s efforts to ensure that apprentices are paid fairly, our research is clear. This can only translate into higher wages for apprentices if everyone is aware of rules and confident in enforcing them.