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Wage rules set to change for apprentices

22 June 2010

The new government has accepted the Low Pay Commission’s previous proposals to increase the national minimum wage and introduce an apprentice rate for the first time from October this year.

In February this year the Low Pay Commission (LPC) submitted its annual report to the Labour Government, recommending increases to the national minimum wage (NMW) and the introduction of a new apprenticeship rate for the first time.

The new coalition government has now accepted the LPC’s previous recommendations, which will come into force in October. It has also asked the LPC to submit a new report, making recommendations for next year, by the end of February 2011.

Therefore, from October 2010, the following rates of NMW will apply:

From October the Adult rate will apply to workers aged 21 and above. Until now this rate has applied only to workers aged 22 and above. The Development rate will therefore apply to those aged 18 to 20 inclusive from that date.

Apprentices

Certain categories of apprentice are currently exempt from the NMW.

The exemption from the NMW applies to apprentices aged under 19 and those aged 19 or over in the first 12 months of their training.

For the purpose of the National Minimum Wage, an apprentice is a worker who either has a contract of apprenticeship or is taking part in a specified government apprenticeship scheme.

However, employed apprentices in England are currently entitled to a minimum weekly wage of £95 where they are on government-funded apprenticeship training.  There is no such minimum in Wales, Scotland or Northern Ireland.

In respect of apprentices, LPC’s recommendations are that:

The new arrangements for an apprentice minimum wage will cover those employed under traditional contracts of apprenticeship and those employed on government supported schemes.

Transitional arrangements

In England, where apprentices are already subject to a minimum weekly wage, the LPC recommended that transitional arrangements be put in place so that current apprentices will retain a contractual entitlement to a minimum of £95-a-week for the remainder of their apprenticeship or until they are entitled to the National Minimum Wage.

Exclusions from the apprentice minimum wage

The vast majority of apprentices are employed and receive a wage. However, there is a small number who are not employed, at least initially.

These non-employed, unwaged arrangements may exist for example, where an employed place is not immediately available. Such non-employed apprentices receive an allowance, paid by the State instead of a wage from the employer and they will continue to be exempt from the NMW.

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