Apprentices should be covered by Minimum Wage laws

View Latest News Publish Date: 7-Aug-2008

Apprentices should be covered by Minimum Wage laws

All apprentices should be protected by the national minimum wage (NMW) in order to end exploitation and reduce the number of people who drop out because they cannot afford to complete their training, says a new TUC report.

In its submission to the Low Pay Commission (LPC) minimum wage apprentice exemption review, the TUC says that bringing all apprentices into the NMW regime will improve the quality and reputation of apprenticeships by increasing completion rates for low-paid apprentices and tackling exploitation by unscrupulous bosses. It will also boost equality as the lowest paid apprentices are most likely to be women.

The TUC report argues that those apprentices that are not currently entitled to the NMW should be brought into the regime and paid a special rate at a slight discount from the standard NMW rates. Apprentices under the age of 19 and older workers in the first year of training are currently exempt from the NMW. The TUC estimates that just 30 per cent of apprentices are currently protected by the NMW.

The TUC report shows that the introduction in 2005 of an £80 minimum weekly pay rate for apprentices in England has had a big impact in improving completion rates. Apprenticeship completion rates have more than doubled over the last five years, from 28 per cent in 2002/03 to 63 per cent in 2006/07. The rate of improvement has been greatest in low-paid sectors such as child care (181 per cent improvement in completion rates), health and social care (150 per cent) and hairdressing (125 per cent).

However, the TUC report argues that these rates still need to improve, particularly in low-paid sectors, where around four in ten apprentices do not complete their training. The TUC cites Government-commissioned research by the National Foundation for Educational Research, which found that 27 per cent of apprentices who had dropped out of the training stated 'not getting enough money' as the main reason.

Female apprentices, who dominate the low-paid sectors, bear the brunt of poor apprentice pay and earn on average 21 per cent less than male apprentices. Increasing pay would therefore also help to reduce the gender pay gap in apprenticeships, which is currently higher than the rest of the labour market average of 17 per cent. The TUC believes that bringing all apprentices under the NMW enforcement regime is the most effective way of addressing low pay and tackling the minority of employers that treat apprentices as cheap labour. Recent Government data revealed that five per cent of apprentices received less than £80 a week and 12 per cent received no pay at all. The TUC submission cites examples of employers that try to keep employees on an apprenticeship after their training to avoid paying the NMW.

Apprentice pay has long been incorporated into the minimum wage regulations in Australia, whilst the Republic of Ireland has set minimum wage rates for apprentices since 2002. In both countries, the number of apprenticeships has continued to grow, allaying any fears that increasing apprentice pay would deter employers from offering training places.

TUC General Secretary Brendan Barber said:

'Apprentices need to complete their training if it is to fully benefit themselves or their employer, so increasing completion rates is absolutely vital to the success of apprenticeships.

'Ten years on from the minimum wage becoming law, millions of low-paid workers have benefitted from better pay and protection from exploitation. It's now time for apprentices to benefit from these rights too.

'Apprenticeships are very different today from the traditional model, with many trainees finishing their programme within a year. This development must be reflected in their pay and conditions. 'Evidence from the UK and across the world shows that decent pay must be at the heart of any successful apprenticeships programme. The Low Pay Commission must use this evidence to bring all apprentices under the national minimum wage regime. At only a small cost to a minority of employers, this would help apprentices who are struggling to afford their training, particularly women.' 

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