Low Pay Commission gets revised remit from ministers
The government has called for a simplified process for paying apprentices the minimum wage in its revised remit for the Low Pay Commission (LPC).
Currently, the rate an apprentice receives is dependent on their age and how long they have been on their apprenticeship.
The government believes this process is often difficult for employers to understand and can lead to poor compliance, with many workers not receiving the minimum rate they are entitled to.
“I want to see apprentices paid the right wage, so I am asking the LPC to simplify the system to make it easier for employers to know exactly what wage they must pay,” business secretary Vince Cable said in a statement on the government’s website.
Cable had previously asked the LPC to consider the wider economic impacts that above inflation increases in national minimum wage (NMW) rates could have on the employment market.
“The NMW provides vital protection for low paid workers and a real incentive to work. From this October 2014, low-paid workers will enjoy the biggest cash increase in their take home pay since 2008. As the economy continues to strengthen, I want more workers to share the benefits of the recovery,” Cable said.
“This is why I am asking the LPC to once again look at whether the economy is strong enough to support above inflation rises, helping those on low pay get a fairer deal,” he added.
The LPC’s annual review of different NMW rates will inform what levels should apply from October 2015.
The commission’s previous recommendations to increase the national minimum wage for adults and young people will take affect in October 2014, with the rate for adults rising 3 per cent to £6.50 per hour.
There will also be a 2 per cent rise across the board for apprentices, 16-17 year olds and 18-20 year olds, each receiving £2.73 per hour, £3.79 and £5.13 respectively.
TUC general secretary Frances O’Grady welcomed the proposal to streamline the apprenticeships rate and called for wage growth to reflect the improving economy.
“With figures suggesting that nearly a quarter of apprentices get paid less than the law says they should, we welcome moves to simplify the system. This would prevent employers who cheat their apprentices out of the minimum wage from using the excuse that they didn’t understand they had to pay it,” she said.
“The UK economy needs highly trained individuals if it is to continue to grow, and this will only happen if we can guarantee all young people good quality apprenticeships on decent rates of pay.
“And now the economy is finally growing again, and with years of falling real wages taking its toll on household incomes, we can well afford to see a substantial increase in the minimum wage next year,” she added.