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IER research used to inform apprenticeship pay setting

The Low Pay Commission's Report 2020 was launched on 9th December 2020, and was used to set National Minimum Wage (NMW) rates for 2020/21 as announced by the Chancellor Rishi Sunak on 25th November 2020.

IER's report 'How Employers Set Pay For Apprentices' involved a multivariate analysis of apprenticeship pay data, and 30 case study interviews with employers delivering apprenticeship frameworks where low pay was greatest.

The study found that the minimum wage for apprentices applied almost exclusively to new recruits rather than existing employees, who were paid their existing rate for the job. For new recruits, few employers paid the apprentice minimum wage. Instead they added a bonus: as a recognition of the apprentices contribution to the business; out of 'fairness' as part of a Corporate Responsibility; and due to wider market rates either as a result of market forces or because of occupation or sector wide agreed pay rates. The NMW apprentice rate was most likely to be used in those sectors where fully qualified workers were paid the NMW age rate in order to maintain differentials.

Wed 16 Dec 2020, 18:29 | Tags: pay, apprenticeship