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Daniel

Why underpaying apprentices devalues an apprenticeship

Monday, 18 March 2013
By: Daniel
 

Apprentices should be paid at least the minimum wage. That was the message of the 'I'm an apprentice – value me' campaign, launched by the Trades Union Congress last year, which fought against the underpayment of apprentices.

They argued that underpaying apprentices not only devalues the apprentice, but the entire concept of an 'apprenticeship'.

Since October 2010, employers have been required to pay at least the apprenticeship minimum wage rate to apprentices aged between 16 and 18, or those 19 or over in their first year of training.

Recently this was increased to £2.65 an hour (it was previously £2.60). For those apprentices that have completed a year of their apprenticeship, the minimum is aligned to the National Minimum Wage appropriate to their age group:

  • £3.68 for under 18s
  • £4.98 for apprentices aged between 18 and 20
  • £6.19 for apprentices aged 21 and over (past their first year of the apprenticeship)

According to recent research carried out by IPSOS MORI for BIS (The Apprenticeship Pay Survey 2011), 20 per cent of apprentices are paid under the minimum required.

This was not a particular problem with some of our frameworks. The average median hourly rate for apprentices on the Team Leadership and Management Framework was £8.33. Customer Service apprentices received £6.73 and those on the Business Administration Framework received £5.82.

However, apprentices enrolled on the Team Leadership and Management and Business Administration Framework were more likely than others to not get paid for overtime, which effectively lowers the hourly rate.

It is not that there is no appetite with employers for raising the National Minimum Wage for Apprentices. The CIPD Spring Labour Market Outlook suggested that on average employers would be prepared to pay £5.00 an hour for an apprentice, which would represent a sharp increase. The increase in the National Minimum Wage for apprentices could have the effect of improving the status, and increasing the exposure of apprenticeships, as a good post-school option for young people. Additionally, it also ties in with the idea of 'quality' in apprenticeships: quality apprentices should get a commensurate rate.

A real cause for concern is that 5 per cent of respondents said they do not receive any pay at all. Furthermore, people within this group are more likely to be from a black and ethnic minority background or aged 18 or under.

In addition, employees within the 20 per cent bracket who were receiving less than the minimum wage were more likely to be under 24 years old. These findings potentially damage the attempts to increase equality and diversity in apprenticeship uptake, given the National Apprenticeship Service's commitment to prioritising this as an issue.

However, there are a lot of good employers out there. The Apprentice Pay Survey found that the median average rate of pay per week for an apprentice was £200, and 80 per cent of apprentices earn the minimum or above.

But what of those who get paid below the minimum, or worse still, do not get paid at all? And, how can we ensure that certain groups will not be more at risk than others?

I think for a start there is a need for greater clarity and simplicity in relation to the system; part of the problem may be that the current system relating to Minimum Wage is not understood by all employers. Aligning the Apprenticeship Minimum Wage to the national Minimum Wage could achieve a dual goal of simplifying the issue, and putting the material interests of apprentices on an equal footing with other employees.

In addition, campaigns like 'I'm an apprentice – value me' serve to highlight these issues and raise their profile, to show that apprentices should be paid at least the legal minimum and that this should be the case for people of all backgrounds.

Raising awareness of these issues seems like a good place to start to me.

If you are an apprentice and are concerned that you are not getting the correct pay, or if you are a training provider who is concerned that apprentices are not getting the correct pay, you can contact the Pay and Work Rights Helpline on 0800 919 2368.

 

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  • Daniel
    @Fenny I completely agree with you. There are other issues in relation to this though. Low apprentice pay could add an extra financial burden on parents with children in the first year of their apprenticeship: not all parents can afford this. Also, for an apprentice in London, low pay is further magnified because of greater living expenses.

    It would be unfortunate if young people are put off apprenticeships because of the apprentice minimum wage as the long-term benefits of undertaking an apprenticeship are well documented. However, some may be unwilling to take the short-term hardship.
  • For apprentice frameworks like Engineering, where apprentices spend their first year in a training college, the basic rate of £2.65 is just about OK, although most big companies pay significantly more than this. But for frameworks where the apprentice will actually be in the workplace doing real tasks, then employers should pay at least the age related minimum wage. If they get a job in Tesco, they get minimum wage and training, so why let apprentices' employers pay less? And for 19+ starters, £2.65 is a complete joke. Employers wonder why they don't get applicants at this pay rate!