Apprenticeship wages

From 1st April 2017, the new National Minimum Wage (NMW) for apprentices will increase to £3.50 per hour. The adult rate will now be £7.50 per hour, the 18 to 20 year old rate will be £5.60 per hour, the 16 to 17 year old rate will be £4.05 per hour and the accommodation offset will be £6.00.

Apprentices aged 19 and above in the second year of study will be entitled to the age-related rate.

The last Apprenticeship Pay Survey estimated that around 15% of level 2 and 3 apprentices were being underpaid the NMW, much higher than the non-apprenticeship population.

The most common mistakes leading to underpayment are:

  • Non-payment of all hours – Employers are required to pay for training time (at college) as well as working time. Travel and sleeping time must also be accurately counted.
  • Apprentice Age – Apprentices aged 19+ in their second year are entitled to different age-related rates of pay. Employers must monitor the age of the apprentice.
  • Second year of Apprenticeship – For Apprentices aged 19+, once they have completed their first year the pay rate reverts to the age-related rate. Employers must monitor the tenure of the apprentice.
  • Unofficial ‘Apprenticeship’ or not yet started – an Apprenticeship is a job which incorporates on- and off-the-job training leading to nationally recognised qualification. Employers can only apply the Apprentice NMW for official apprenticeship commencing from the agreed apprenticeship start date.
  • Accommodation offset – Accommodation provided by an employer can be taken into account when calculating the NMW but must be in line with guidance.
  • Uniform/Equipment costs – Any tools, uniform and safety equipment costs for the job should not be included in NMW calculations.

It is your responsibility as an employer to pay workers at least the NMW. An employer who has underpaid workers must correct this immediately or will face increased enforcement action.

Please visit - https://www.gov.uk/national-minimum-wage or http://www.acas.org.uk/nmw for more support to ensure you pay your staff in line with the new NMW.