Government asks Low Pay Commission to review apprentice wage

The Government has asked the Low Pay Commission (LPC) to look at ways of streamlining the wage rate for apprentices.

The request comes as part of its annual remit to the LPC, which comes up with recommendations on minimum wage rates.

Currently, apprentice rates depend on age and how long someone has been on an apprenticeship, which can be difficult for employers to understand.

The Government has also asked the commission to look again at whether or not above-inflation increases in minimum wage rates can be made without harming employment, when it makes its recommendations for next year’s rates.

In March, it was confirmed that the national minimum wage would increase by an inflation-busting 19p per hour to £6.50 from October this year. This would mark the first minimum wage rise in six years to be higher than inflation.

At the time, the LPC suggested that the Government should have a minimum wage target of £6.94, and recommended further progressive wage increases to mirror the improvement in the economy.

Business secretary Vince Cable said: “As the economy continues to strengthen, I want more workers to share the benefits of the recovery. This is why I am asking the LPC to once again look at whether the economy is strong enough to support above-inflation rises, helping those on low pay get a fairer deal.

“In addition, I want to see apprentices paid the right wage, so I am asking the LPC to simplify the system to make it easier for employers to know exactly what wage they must pay.”

Apprentices currently attract a minimum wage of £2.68 per hour, a level which many employers who offer apprenticeships believe give the schemes a bad name.

Trade Union Congress general secretary Frances O’Grady welcomed the review of apprentice wages: “With figures suggesting that nearly a quarter of apprentices get paid less than the law says they should, we welcome moves to simplify the system,” she said.

“This would prevent employers who cheat their apprentices out of the minimum wage from using the excuse that they didn’t understand they had to pay it.

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“There must be no hiding place for exploitative employers who pretend to take on staff as apprentices yet never offer them a single hour of training, just so they can source labour on the cheap.”

Dr Adam Marshall, executive director of policy at the British Chambers of Commerce, added: “Asking the Low Pay Commission to look at ways to simplify the minimum wage rate for apprentices is sensible. Employers would welcome greater clarity, provided that any subsequent changes to apprentice wage rates are backed by robust evidence.”