In the shaming list of 202 employers who had failed to pay minimum wage to their employees and workers, 42 (21%) failed with regards to their lowest paid group of apprentices.
HMRC published as part of round 17 shaming list the main reasons why failures are occurring with apprentices.
Just because an employer may badge a job as an apprenticeship or apprentice role, doesn't mean that is either real or true. The apprentice is more than just a job label, it has legal obligations that an employer must comply.
It has been found that many apprentices are at risk of being underpaid by their employers.
Common underpayment risks for apprentices
The scenarios below reflect the most common risks of underpayment:
- Employers continue to pay the apprentice rate to apprentices who are aged 19 years or over after they have completed the first year of their apprenticeship.
- Employers pay the apprentice rate to a worker who is not an apprentice.
- Employers continue to pay the apprentice rate after the apprenticeship ends.
- Employers fail to pay an apprentice for the time they have spent in training during normal working hours, both on- or off-the-job, as part of their apprenticeship.
Other underpayment risks
All workers, including apprentices, may be also be at risk of being underpaid in the following situations:
- not being paid for all time worked. Working time includes any additional time added on to an apprentice's shift, for example time spent at team handover meetings between shifts, or passing through security checks on entry and exit;
- having deductions made from pay for items connected with the job, such as uniforms and tools;
- being over-charged for living accommodation provided by their employer;
- having tips from customers used to meet minimum wage pay.
Minimum wage apprentice rate
The rate that must be paid generally depends on how old they are, with those aged 23 and over generally entitled to the National Living Wage.
There is a special minimum wage rate for apprentices.
To qualify for the apprentice rate, a worker must be employed under a statutory apprenticeship agreement or a contract of apprenticeship.
A worker will also qualify for the apprentice rate if they are treated as employed under a contract of apprenticeship.
The minimum wage apprentice rate only applies if:
- an apprentice is under the age of 19; or
- an apprentice is aged 19 or over and is in the first year of their apprenticeship.
If an apprentice is aged under 19 an employer can pay them the apprentice rate for the duration of their apprenticeship.
Once they complete their apprenticeship, they must be paid the minimum wage rate for their age from the start of the pay reference period that begins on or after the date they complete their apprenticeship.
The employer can only pay the apprentice rate to an apprentice aged 19 and over for the first year of their apprenticeship. They must pay them the relevant minimum wage rate for their age from the start of the pay reference period that begins on or after the date they complete the first year.
If an apprentice turns 19 during the second or subsequent years of their apprenticeship, they must be paid the 18-20 year old minimum wage rate from the start of the pay reference period that begins on or after their 19th birthday.
Further information on apprentices
For more information on when someone is employed as an apprentice and should be paid the apprentice minimum wage:
For Government guidance on apprenticeships and the minimum wage:
What to do if you have been underpaid the minimum wage
If anyone thinks they have been underpaid, they should complain to HMRC using the online form or call the Acas helpline.
Complaints can be made anonymously and HMRC won't reveal a worker's identity to the employer. HMRC consider every worker complaint they receive. This usually involves contacting the complaint worker to get further details. HMRC won't share your details with your employer if you don't want them to.
Throughout the year, workers can access the Check Your Pay website for clear advice about what their pay should be and how to report breaches. Workers can call the Acas helpline (0300 123 1100) for free, impartial and confidential advice about their rights and entitlements. Acas also offers a translation service. Acas officers will pass on cases to HMRC for further consideration where appropriate.
How can we find out more?
There are a number of places that detailed information can be found, often it is also good to speak to experts.
PAYadvice.UK Simon Parsons will be presenting on National Minimum Wage on 14th July 2023 (and other dates) at the SD Worx Academy: National Minimum Wage – Advanced | SD Worx Academy
Can PAYadvice help?
If an employer has concerns on whether they have challenges with understanding National Minimum Wage law, or want a more affordable and friendly discussion or audit, please feel free to make contact with PAYadvice:
PAYadvice.UK 24/6/2023
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