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Business Secretary Announces Plans to Increase Apprentice Minimum Wage

A new proposal from the Business Secretary which aims to simplify the national minimum wage for apprentices has been announced

A new proposal from the Business Secretary Vince Cable which aims to simplify and boost the national minimum wage for apprentices in order to make apprenticeships a more financially attractive route for young people is to be presented to the Low Pay Commission.

The new proposal would give around 31,000 apprentices, aged 16 to 17 in their first year of their programme, a pay rise of over £1 an hour, rising from £2.73 to £3.79 per hour.

The policy is to be put forward to the Low Pay Commission (LPC) in the next few weeks and would create a single national minimum wage rate for 16 to 17 year olds in employment and for all apprentices in the first year of their apprenticeship.

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The policy is also designed to streamline the number of minimum wage rates employers have to contend with down from 4 to 3, to make it easier for employers to understand and comply with minimum wage law. Currently an apprentice is dependent on their age and how long they’ve been on their apprenticeship.

Business Secretary Vince Cable said:

“The national minimum wage has successfully protected the incomes and jobs of the lowest paid workers in the UK. This year we have made the first above inflation rise in the minimum wage since the recession”

“With the economy on the road to recovery, all workers – including apprentices – should be able to share in the proceeds of growth. We want apprenticeships to remain an attractive option for young people deciding whether to earn whilst they learn or go straight into employment.”

“This is why I propose putting apprentices on a level playing field with young people entering the labour market. Applied to current minimum wage rates, this would be an increase on first year pay of over a third, as well as simplifying a pay structure that all too often catches employers out.”

The LPC will make their recommendations on this, alongside the 2015 national minimum wage rates, in February 2015. Government will then decide on any changes to the structure, based on the LPC’s recommendations.

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