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Employers illegally underpaying apprentices could face jail time

Nearly a fifth of apprentices at levels 2 and 3 are illegally paid less than the minimum wage.

Employers illegally underpaying apprentices could face jail time

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Nearly a fifth of apprentices at levels 2 and 3 are illegally paid less than the minimum wage.  

Since the Government's 2017 apprenticeship pay survey, there's been a lot of discussion about how to crack down on the worst offenders. Employers have never really been prosecuted or even fined for underpaying apprentices, but under new labour-market enforcement, they could now face prison sentences of up to 2 years. These rogue employers are breaking the law – and doing a disservice to their trainee staff – but do they deserve a prison sentence?   

Before we jump to condemn these employers, let's take a look at the facts and find a solution that benefits everyone.

The facts

The pay report found 18% of apprentices are paid less than the minimum wage. Hairdressing apprentices are the worst off – with 47% of workers receiving non-compliant pay – compared to only 7% of apprentices on management frameworks. 

It was also noted that although levels of non-compliance have increased since 2014, so has the number of apprentices paid over £9 an hour. Apprentices in their second year of training also saw an increase in pay, as did the over 25s.  

Mark Dawe, chief executive of AELP, said: 'The survey clearly shows that if there is a long-term relationship between the apprentice and the employer, the apprentice will on average earn a salary well over the minimum wage. However, there is absolutely no excuse for paying less than the legal minimum.'

The problem

So why have these discrepancies happened? There are some repeat offenders who intentionally abuse the system – but this is not the case for most employers. Many SMEs only employ 1 or 2 apprentices a year, and don't have that much to do with the process. This may mean they're unaware of the recent increases in the national minimum wage, and haven't updated their pay policies to stay compliant.  

Thanks to the employer-led standards and apprenticeship levy, employers are becoming more involved in the whole apprenticeship process. This will help employers stay aware of legislation and see the huge value apprentices bring to their business. 

The solution

The solution is simple really – it's all about collaboration. Employers and training providers need to work together to build strong relationships with their apprentices and make sure they stay compliant.  

An easy way to make sure everyone's clued up is to save and store a copy of the three-way apprenticeship employment contract. This document defines the apprentices' hours, salary etc. and is signed by the employer, apprentice and provider. The learner's portfolio is the perfect place to store the contract – it's accessible for audit and can be viewed by users at any time.  

It also covers your back if any mistakes are made during the payment process. 

How can OneFile help?

We've developed our eportfolio so users can attach important documents, such as the employment contract, commitment statement and apprenticeship agreement, within the system.  

We’ve also created an employment contract checklist to help you stay compliant.

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This article includes research and opinion sourced by OneFile at the time of publication. Things may have changed since then,
so this research is to be used at the reader's discretion. OneFile is not liable for any action taken based on this research.