One in 12 of England’s youngest first-year apprentices is paid below the apprentice minimum wage, according to a new report.
The Low Pay Commission Report 2018 on the National Minimum Wage, published today, states that according to the Annual Survey of Hours and Earnings (ASHE), the percentage of apprentices paid below the apprentice rate - which applies to all apprentices aged between 16 and 18, and to those aged 19 and above for the first year of their apprenticeship - is below 5 per cent for older apprentices.
However, for those aged 16-18 in the first year of their apprenticeship, the level of underpayment is at 8.1 per cent, and has increased since 2016, “including an increase of 1 percentage point over the year to April 2018”.
The report states: “Closer examination shows that of 16- to 18-year-olds in year 1 paid below the April 2018 minimum wage, four in five were paid at least the April 2017 minimum wage (the applicable minimum wage up to 31 March 2018). However, the increase in underpayment for this group between 2017 and 2018, measured on the new April uprating cycle, may indicate that non-compliance may be a worsening problem for the youngest apprentices.”
Pay growth
The youngest apprentices also saw weak growth in their wages overall. First-year apprentices aged 21 to 24 saw pay growth of 12 per cent over the year, while 19- to 20-year-olds saw pay growth of 5 per cent. However, median hourly pay actually reduced by 5 per cent for apprentices aged 25 and over, and only increased by 1 per cent for the 16- to 18-year-olds.
Among those in their second year of apprenticeship, however, those aged 25 and over saw the highest pay growth, at 11 per cent, followed by those aged 21-24, where it was 9 per cent, and those aged 16-18 (7%).
“The picture on apprentice pay is mixed,” says the commission’s report. “Pay continues to rise at the median for both first- and second-year apprentices, but increases are not consistent across age groups, and weak for 16- to 18-year-olds in particular.”
“The use of the apprentice rate and measured underpayment are also rising for this group while they fall or remain stable for older apprentices.”
Apprentice pay rate
The Low Pay Commission’s annual report contains the evidence underpinning its recommendations for national living wage and national minimum wage rates to apply from 1 April 2019. These recommendations, which included an increase in the apprentice rate by 5.4 per cent, or 20p to £3.90, were accepted in full by the government and announced in the October 2018 Budget.
The commission points out that making recommendations on the apprentice rate is “challenging” because of the ongoing impact of the policy changes taking place in England. However, it stresses that there was no sense that recent increases in the apprentice rate had affected the uptake of apprenticeships.
