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Proposed change to the National Minimum Wage (NMW)

David McRae
12th Nov 2014

In a bid to make apprenticeships more financially attractive for young people, the Department for Business Innovation & Skills (BIS) is set to propose to the Low Pay Commission (LPC) that the NMW for apprentices should be brought in line with the young workers rate which applies to 16 and 17 year olds.

 

Although evidence shows that most apprentices are paid more than the NMW, an increase in this rate will be a welcome change for the estimated 31,000 who are not. As Business Secretary Vince Cable explained when announcing the proposal, this increase is intended to put new apprentices ‘on a level playing field’ with 16 and 17 year olds going straight into employment.

 

Apprenticeships are becoming a more popular option for young people. The proposal to increase the rate of pay is intended to fuel this further with the aims of further improving the standard of applicants and giving businesses a wider pool to choose from. This could have a long term positive impact for business as evidence shows that apprentices tend to stay with employers longer than other employees. A study has shown 43% of employers are more likely to offer apprenticeships now than they were two years ago.

 

The current NMW rate for 16 and 17 year olds is £3.79 per hour, while apprentices under the age of 19 and in the first year of their apprenticeship are only entitled to a minimum of £2.73 per hour.

 

You can view the press release here.

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