Companies that “exploit apprentices” by not paying them the legal minimum wage should face criminal prosecutions, MPs have said in a new report on apprenticeships.
In its The Apprenticeships Ladder of Opportunity report, MPs on the Commons Education Select Committee call for larger fines and more prosecutions for firms that flout paying apprentices the minimum wage.
Currently, the minimum wage for apprentices is £3.70 per hour. This rate applies to apprentices under-19 and those aged 19 or over who are in their first year of training. Apprentices must be paid at least the minimum wage rate for their age group if they are over 19-year-old and have completed their first year of training.
The report states: “We recommend that the government redoubles efforts to identify and sanction employers who evade the apprentice minimum wage. This means more and effective enforcement, larger fines and many more prosecutions.”
'Fines should be significantly higher'
In May 2018, the government’s director of labour market enforcement Sir David Metcalf described current civil penalties as “too weak a deterrent” and recommended the upper limit for fines – 200 per cent of arrears – be increased. He also called for far more criminal prosecutions—these are rare but there is no upper limit on the fine that can be imposed.
The committee wrote: “We agree with Sir David Metcalf. Exploiting apprentices, many of whom are making significant financial sacrifices to better themselves, should be treated as a serious crime. Fines should be significantly higher for civil offences and far more criminal prosecutions launched. Employers must know that not paying the minimum wage will result in punishment and that this punishment will have a real effect on their business.”
MPs also called for the Social Mobility Commission to conduct a study into how the benefits system helps or hinders apprentices. They wrote: “The government should act on its findings. No apprentice should suffer any financial disadvantage as a result of taking up an apprenticeship.”
In February 2017, Tes revealed that apprentices were being treated like “second-class citizens”, with those from the most disadvantaged backgrounds being denied thousands of pounds of financial support available for college and university students.
'Good quality is vital'
Robert Halfon, chair of the Commons Education Select Committee, said apprenticeships can play a “crucial role” in achieving social justice.
He added: “But those from disadvantaged backgrounds still find too many barriers to undertaking an apprenticeship. Travel costs should be cut for young apprentices. We need to move towards abolishing the apprentice minimum wage, introduce more bursaries, and a new social justice fund is necessary to support enterprises, charities and others that help the hardest to reach.”
Chief executive of the Association of Employment and Learning Providers Mark Dawe said the government needs to heed this message from the committee as they move forward with further reform.
He added: “Good quality is vital but equally the social mobility agenda can only be served if we have a funding system that puts right the disastrous fall in apprenticeship opportunities which smaller business offer our young people, especially now that the government is now committed to migratory controls after Brexit.”
Julian Gravatt, deputy chief executive of the Association of Colleges, said he thinks the committee should have gone further and recommended increases in the funding available for training, adding: "The current funding rates five-figure sums for higher level apprentices and less for those programmes taken by school leavers.”
'Make apprenticeships pay'
Stephen Evans, chief executive of the Learning and Work Institute said he is pleased the committee has highlighted apprentice pay.
He added: “Too many apprentices are not even paid the legal minimum which they’re entitled to and our research shows many employers don’t understand the rules. When this is linked with wider issues about the benefits system and the need for action on the government’s manifesto pledge for assistance with travel costs, it points to the need for a wider strategy to make apprenticeships pay.”
Kevin Courtney, joint general secretary of the National Education Union, said: the government needs to do more to ensure that young people have the opportunity to access apprenticeships, adding: "While there is certainly the demand from young people, employers are reluctant to hire them, preferring to recruit older and existing employees.”
Shadow skills minister Gordon Marsden said: "Labour has repeatedly, both in Parliament and elsewhere, held the government to account for failing to utilise the input and ideas of the apprentice panel or indeed even to meet properly with them.
"[The government is] not doing enough to support underrepresented groups, including young people with learning or other disabilities or from BAME or disadvantaged backgrounds, or to give enough practical support for them on transport costs and other benefits. These are all things the committee has echoed in its report."