Do I have to pay the minimum wage to an apprentice?
This call referred to one of our clients who was thinking of taking on an apprentice and he wanted to know whether he would have to pay a minimum wage.
Historically apprenticeships had long been the bane of many a business across the UK before 2012. Prior to the changes made by The Apprenticeships (Form of Apprenticeship Agreement) Regulations 2012 you could describe them as being bitter sweet.
The bitterness being that once you had taken an apprentice on you were pretty much stuck with them, at least until the end of the term of the apprenticeship, unless there was some extreme circumstances which justified terminating the agreement early. The sweetness being that it was cheap labour, since during the first year of an apprenticeship they were only entitled to an allowance.
The 2012 regulations meant that apprentices could be treated much the same as employees and the wall of protection had finally been brought down! This meant that if they were not shaping up you could ship them out so long as they had not attained the qualifying period to bring an unfair dismissal claim.
So are apprentices entitled to a minimum wage?
They are indeed, the days when employers could pay a pittance to apprentices during their first year are well and truly over! That all changed in 2010 when a minimum wage was brought in for apprentices.
Apprentices were originally excluded from the national minimum wage (NMW) but, in October 2010 an apprentice rate was introduced for apprentices under 19 or in the first year of their employment. Once an apprentice is aged 19 or over and has completed a year of their apprenticeship, they are then entitled to the NMW rate for their age.
The current hourly rate for apprentices is £3.40 per hour rising to £3.50 per hour from 1 April 2017.
The rules relating to apprentices have in previous years been complicated and but were simplified by the 2012 regulations. However, the Apprentice Levy is due to take effect from 6 April 2017. Businesses with a wage bill of three million pounds or more must pay 0.5% of its wage bill into the scheme. This is to encourage employers to invest in apprentices. Just when you think things are settling down, the government comes along and pulls the rug from right under your feet.
No fear Quest is here! Employment law can set upon you like a thief in the night as it changes so frequently it is hard to keep up with it all. Quest is here to ensure you are kept abreast of all you need to know so as not to fall foul of the law.
For help and information regarding Apprentices, National Minimum Wage or HR Outsourcing, contact us. Download a QView for more information: Apprenticeships and / or National Living Wage HR Guides: National Minimum Wage Further articles which may also be of interest: National Living Wage and National Minimum Wage
