All apprentices of any age can start at £3.50 an hour. Could you survive on this pay rate.
For all apprentices over the age of 19 years this is only for the 1st year of a new apprenticeship.
An Apprentice under 19 can be kept on £3.50 an hour until they reach the age of 19 years of age. They could complete 1 apprenticeship and start a new one ( example start a level 3 apprenticeships after completing a level 2) and could still be paid 3.50 an hour.
Pay rates for apprentices who reach the age of 19 having completed 1st year of apprenticeship
Rates of pay
The rates from 1 April 2017 are:
- £7.50 per hour – 25 yrs old and over
- £7.05 per hour – 21-24 yrs old
- £5.60 per hour – 19 yrs old
For all apprentices over 19 years of age starting an apprenticeship, can be paid £3.50 for the 1st year. After 1st year of apprenticeship they will have to then be paid the the correct NMW for their age
A person over the age of 19 who has already started completed an apprenticeship, and who starts a new apprenticeships can once again be started on the £3.50 an hour start pay. (This is something that has to be addressed)/
In particular, apprentices can struggle with very low pay, not only because the apprenticeship rate is set so low, but because there are high levels of non-compliance, especially for those aged 18-20 and in certain occupations. The LPC has previously stated there may be a ‘culture of non-compliance’ in relation to hairdressing in particular. The forthcoming Apprenticeship Pay Survey 2016 should shed further light on this issue, but it is clear that this remains a major problem.
National Minimum Wage – Low Pay Commission consultation National Union of Students response
The Low Pay Commission must make its recommendations in light of these considerations, and we hope our evidence will help in this process. Our evidence this year looks at two main areas: the age and apprenticeship differentials and compliance.
The report still has to be published as reported by FE Week Mark Winterbotham, the director of the firm which carried out the survey, told FE Week that he didn’t know why it hadn’t yet been published.
He described the project as a “large scale survey of 9,422 apprentices, conducted by telephone from early June 2016 to the end of July 2016”.
He insisted that his organisation had handed the final drafts of the reports over to the government in January, but admitted he had “not had any communication since early March” with the research team at BEIS, which replaced BIS in July.
“They’d be the only ones able to say why it’s not been published yet,” he said.
But the government, asked this week when the report could be expected and what had caused the hold-up, would only say it would be published “in due course”.
The survey was described by BIS as an “important research project providing information on training, hours and pay from current apprentices”.
The survey findings were to be “used by government to help set pay policy generally and make improvements in apprenticeship training” and would “enable us to look at wage levels nationally, measure changes with previous years and monitor whether employers are adhering to the rules on fair pay”.
According to the Low Pay Commission’s report: “The 2016 survey shows that the vast majority (83 per cent) of apprentices, where an assessment can be made, are paid at or above the appropriate NMW rate” – suggesting that 17 per cent were not.
This is up from the 14 per cent found during the 2014 survey, which was based on telephone interviews with 9,367 apprentices.
In 2012, the Apprenticeship Pay Survey, which takes place every two years, found that 29 per cent of the 5,635 apprentices it interviewed were underpaid.
Age and apprenticeship differentials It has been NUS policy over many years that the National Minimum Wage should be equal for all ages and for those undertaking apprenticeships. The new ‘national living wage’ (NLW) for those aged 25 and over, which was introduced earlier this year, has introduced a new differential, and has made the relative position of the others even worse. The apprenticeship minimum wage is now less than 50 per cent of the NLW rate, with the potential for perverse consequences as noted in the LPC’s report, of employers rebranding jobs as “apprenticeships” or of non-compliance with NMW law1
.The introduction of the NLW was predicated on the Government’s ambition to “increase the real value of the National Minimum Wage” and an acknowledgment in its July budget that the minimum wage must reflect the actual cost of living, which the adult rate of the NMW fails to do – to say nothing of the other rates. Yet the age differential at 25 serves only to entrench discrimination for young people in the minimum wage arrangements, just as social security benefits for young people and student support face significant cuts. It may be political acceptable to pay young workers a lower wage, but it is only legally so because of a specific exemption to age discrimination legislation and we believe this is being further exploited through the new rates. Such discrimination may be presented as being ‘helpful’ to young workers – but were this any other group with a protected characteristic but lower employment rates than the average it would be considered ridiculous to have an overt lower wage rate (let alone three different rates), and it should not be any more acceptable for young people. They have as much a right and a need for a living income as any other citizen group.
Sadly, although it is not the intention, there are significant equality issues caused by the low pay rates for apprenticeships: women workers are much more likely to be in those apprenticeships (hairdressing, social care) that pay at the minimum wage, whilst men dominate in better paid sectors such as engineering. The apprenticeship rate entrenches gender inequality by allowing those sectors to pay their female apprentices such a small amount and does nothing to alleviate poverty.
In general, that the apprenticeship rate is so low that it creates real hardship amongst apprentices. In our recent report, Forget Me Not, we outline in some detail the financial struggles of apprentices on the current apprentice minimum wage2 , including reliance on commercial credit. Other NUS research3 indicates that almost a half of apprentices are making choices about what apprenticeship to do based on what they can afford to get to, not on the basis of any information advice and guidance they might have received or their own career aspirations.
Certain employers will soon receive allocations from funds collected via the new apprenticeship levy. NUS believes that they should use some of these funds to top up the wages of the lowest paid apprentices. Given the reluctance of many to pay more than the minimum the levy policy may give the LPC some leeway to be far more ambitious in its recommended increase.
The LPC must close the yawning gaps between the different rates. It should be of the utmost priority to ensure younger workers and apprentices see a substantial increase in their NMW rates. Moreover, the new ‘national living wage’ rate is set too low, and NUS believe that a genuine Living Wage should be paid to all.
Compliance Given the justifications for age and apprenticeship differentials, and the problems the low rates cause, the need to ensure compliance with the law is all the greater. High rates of non-compliance are particularly associated with apprenticeships and internships, and continued action to understand and address this problem is essential.
The 2015 research4 commissioned by the LPC into apprenticeship minimum wage compliance suggests that some of the data reporting is flawed and our picture of this situation may be inaccurate. We hope that this can be corrected in the 2016 Apprenticeship Pay Survey, but the data we have still suggests much higher noncompliance for younger workers and in certain sectors.
It is also clear that tackling non-compliance is not simply a matter of ensuring employers set their hourly pay rates at the minimum or more, but in addition on ensuring their understanding certain nuances such as the fact tips should not be used to top up pay to the minimum rate, or the treatment of ‘off-the-job’ training hours. Employer ignorance is no excuse but while the LPC will need to continue to place an emphasis on strict enforcement and public identification of those employers who are failing to comply with the law (and we welcome the instances where this has occurred), education employers will also be crucial.
The quality of apprenticeship programmes is equally important. Even where apprentices are paid the correct rate they may not be receiving the training that ostensibly justifies their lower pay: 20 per cent said they received neither on or off-the-job training, and BIS research suggests this the “key factor” is “lack of interest and support from employers,” suggesting that in some cases employers are employing apprentices so they can pay this worker less without ever wishing to invest in training, an analogous situation to those employing ‘internships’ which they believe do not attract any wage at all – indeed such exploitation was reported by learners interviewed
Summary of recommendations Given the evidence set out above, our recommendations are:
1. That the Low Pay Commission recommends to Government the equalisation of the National Minimum Wage so all workers, including apprentices and regardless of age, receive the same rate and that rate is set at the national living wage rate.
2. That the LPC the national living wage be set at those rates defined as a true living wage by the Living Wage Foundation (presently £9.40ph in London and £8.25ph elsewhere).
3. That the LPC should continue to recommend strong action is taken to enforce minimum wage rules around apprenticeships, internships and unpaid work experience, to avoid further exploitation of young workers.
BENEFITS FOR FAMILES WITH AN APPRENTICE UNDER 18 YEARS
Apprenticeships and Loss Of Child Benefit (and potentially all other support) when your Child reaches 16 and finds Employment as an apprentice:
From this point on parent’s are treated as having a non-dependant adult living in their household and this will affect any other benefit that the family may be in receipt of.
For example, as soon as the parent loses entitlement to Child Benefit, they will also lose any entitlement to Child Tax Credits payments for that child; Working Tax Credit will also be affected depending on the parent’s income from employment, as will Housing and/or Council Tax Benefit.
This can be hugely detrimental to a working family on a low income (or a lone parent).
BUT, what parents are not being told is that they will lose their entitlement to Child Benefit payments for that child, as well as Tax Credits, because the child is over 16 and ‘employed’, albeit on a low apprentice wage.
Young people aged between 16 and 20 are still classed as “dependants” for Child Benefit and Tax Credit purposes, as long as they are in full-time non-advanced education or are doing an ‘approved training’ course. The Problem being that the apprenticeship scheme via an employer is not classed as approved training.
I would like the Government to review this and make Apprenticeships APROVED TRAINING so families can keep Child Benefits and all other benefits such as working tax credits/housing benefits etc in place for families with apprentices till they are 18 the same as full time education which can be a little as 12 hours per week to class as full time and apprentices are just behind at 7 hours, at current they only get paid £3.30 per hour working 30-40 hours per week and is nothing for an apprentice to live on they shouldn’t have to pay their parents to support them as they are still in education whether its work based or full time college.
Many parents make the choice to keep their child in full time education over apprenticeships as the cannot afford the benefit cuts, this is unfair on the child as they may have really wanted an apprenticeship SO THERE FUTURE CHOICES ARE TAKEN AWAY FROM THEM! Join us on the 13th July, in Coventry.