Question

To ask the Secretary of State for Business, Innovation and Skills, with reference to page 5 of his Department's publication, National Minimum Wage, Interim government evidence for the 2015 Low Pay Commission report, published in October 2014, what assessment he has made of the implications for his policies of the rate of non-compliance with the National Minimum Wage (NMW) for apprentices; and what steps he plans to take to increase the rate of compliance with the apprentice NMW.

The Government is committed to the National Minimum Wage and is absolutely clear that everyone who is entitled to it should receive it. Any worker who thinks they have been underpaid should call the Pay and Work Rights Helpline on 0800 917 2368. HMRC investigates every complaint made to the helpline and calls from apprentices are prioritised for consideration.

The Government is aware that non-compliance involving apprentices is an issue and we are taking action. We are:

· Ensuring that all training providers [in England] deliver on existing obligations to inform employers and apprentices of their NMW requirements.

· Improving guidance and information more generally, to ensure we have clear and comprehensive information on the minimum wage rules. In England the National Apprenticeship Service includes information on the NMW in its information pack for employers taking on an apprentice.

· Encouraging workers to call the Pay and Work Rights Helpline if they think they are not getting what they are legally entitled to through our communication campaign which began in Sept 2014.

· Writing to level 2 & 3 apprentices in England informing them of their NMW entitlement.

We have also asked the Low Pay Commission (LPC) to consider whether we can simplify the apprentice rate structure so that it is as clear and simple as possible, in order to support those employers who take on apprentices. The LPC will report back with their recommendations in February 2015.

We are continuing to take a tough approach towards all employers that do not comply with the National Minimum Wage (NMW) law, including through making their non-compliance public. 55 employers, including some who underpaid apprentices, have been named so far and between them they owed workers a total of over £139,000 in arrears.

The Government has also increased the financial penalty percentage that employers pay for breaking minimum wage law from 50 per cent to 100 per cent of the unpaid arrears owed to workers and the maximum penalty from £5,000 to £20,000. This came into effect on 7 March 2014. We are introducing primary legislation so that the penalty can be calculated on a per worker basis which will substantially increase the penalty for some employers.

There have been no prosecutions since 2010 involving apprentices. Prosecution is reserved for the most serious cases. The Government usually pursues other means, which are more effective, to achieve the key goals of getting workers paid their arrears of wages and deter employers from being non-compliant. For example, the Government policy on the naming scheme and the increase in the NMW civil penalty will have considerable reputational and financial consequences for employers who are non-compliant with the NMW. However, HMRC will refer suitable cases to prosecutors.