Apprenticeships play a crucial role in bridging the skills gap and fostering the growth of industries. However, according to HMRC, there is a concerning statistic showing that one in four National Minimum Wage underpayments involves apprentices.
In this post, we will shed light on the differences between National Minimum Wage and National Living Wage, and look at the importance of meeting National Minimum Wage requirements for apprenticeships.
What is the difference between the National Minimum Wage and National Living Wage?
Before we look any further at apprenticeships, it’s essential to grasp the distinctions between National Minimum Wage (NMW) and National Living Wage (NLW). While both are legal requirements for employers, they differ in the age ranges that they cover.
The National Minimum Wage is the minimum pay per hour that practically all workers over school leaving age are entitled to, regardless of the number of hours they work or whether they have a contract. It does not matter about the size of the employer; every business must pay the correct minimum wage for employees.
The National Living Wage specifically targets those workers aged 23 and over. This is set as an hourly rate by the government and is updated each year. It is fixed at a rate which ensures that workers can afford to meet their basic needs such as housing, food and energy prices.
Employers must adhere to these rates to ensure fair compensation for their workforce, and they can be taken to court if they are found to not being paying enough.
Who is not entitled to the National Minimum Wage in the U.K?
As we said, most workers in the UK are entitled to the National Minimum Wage. There are, however, some exceptions.
Employees not entitled to the National Minimum Wage include those who are under school leaving age, those living or working with a family as a nanny and not paying towards accommodation or meals, members of the armed forces, and family members of an employer living in the employer’s home, amongst others.
What is the minimum wage for those on an apprenticeship in the UK?
From April 2024, the apprentice minimum wage in the UK is £6.40 per hour. This rate should be used for those apprentices aged 16-18, as well as those aged 19 and over who are in their first year of their apprenticeship. After that first year, apprentices should receive at least either the NMW or the NLW depending on how old they are.
Workers on government pre-apprenticeships schemes do not qualify for the NMW or NLW.
The alarming statistic quoted by the HMRC shows a worrying trend for those in apprenticeships not being paid enough. Employers must be vigilant in meeting the National Minimum Wage requirements for apprentices to avoid legal repercussions.
Apprentices, like any other employees, are entitled to receive the minimum wage as stipulated by the law. It is crucial that businesses regularly review and update their pay structure to align with the latest NMW rates. Investing in proper record-keeping and payroll systems can streamline the process and help demonstrate a commitment to fair employment practices.
Be sure to meet the National Minimum Wage with apprenticeships
Apprenticeships are a valuable avenue for skill development and workforce growth. However, as HMRC’s findings suggest, it is crucial to ensure compliance with National Minimum Wage requirements to safeguard the rights of apprentices.
It’s worth remembering that meeting National Minimum Wage requirements isn’t just a legal obligation, it’s a commitment to building a fair workforce.
If you need help in understanding the differences between NMW and NLW, or could do with guidance on how much you should be paying employees in apprenticeships, please get in touch with us at Office Assistants.
