Does having a free apprentice break the law?

Goldspoon · 22 Nov 2009

I have had a few people offering to work with me (plumber) for free to gain experience. I spoke to one such person recently and thought to myself: "I'd rather pay him something at least - say £30-£60 a day depending on the job price".

But then I would be breaking the minimum wage law...?

Surely not paying him at all is just the same as paying him £1, £3, £5 an hour as regards to the minimum wage - all are illegal?

Perhaps he is paying me for training and it's not a job? But then again that is a loophole any company could make to get around the law.

"I actually pay him £8 and hour but he pays me £5 an hour for the training so hence the £3 an hour" sort of get round the law device.

Any thoughts?

TonyW2 · 22 Nov 2009

What a minefield where common sense and the participants best interests conflict with red tape and the law!
If his work is worth £8 an hour then any training should be provided seperately and in addition to the work at a charge of £5.
Otherwise the work should be seperated into its components of hours of work at one rate paid by you on an employment contract between yorselvesand hours of training at a payment rate as a purchase of training services by him from you. You may wish to set up a seperate branch of your company as a training provider.
Suitable records would be needed and both parties would need to pay tax on the income. ie You on £5 an hour for "working" as a trainer and "him" on £8 an hour for working as an (untrained) plumber.
You could offset the £8 as a cost against your gross profits.
No doubt some grants could be claimed from some source, creating further paperwork, and suitable insurance arranged with documented H&S.
Your arrangements could escalate until the whole of the country's une3mployed could move into paid employment to accomodate your initially simple requirement.
Alternatively you could carry on with your totally unacceptable, immoral and illegal system and actually get something sensible done.

gregers · 22 Nov 2009

i wonder if the young chap could go self employed???that way on paer if he is only earning a few quid a day.he wont pay much tax?
or is this another unexceptable way.

D_Hailsham · 22 Nov 2009

What about all the volunteers who work in charity shops for nothing? Are the charities breaking the law by not paying them at least the minimum wage?

ajstoneservices · 22 Nov 2009

If you take on an apprentice then you must pay the correct rate according to their age.

Apprenticeship and training pay

bullet point Sometimes there are agreed rates for certain stages of an apprenticeship. This means you may get pay increases when you have a birthday, achieve a qualification or reach a certain standard.
bullet point Minimum wage rules do not apply to all stages of an apprenticeship. 16 to 18 year old apprentices are exempt from the minimum wage.
bullet point Apprentices aged 19-25, who are in the first 12 months of their apprenticeship, are not entitled to the minimum wage until the second year of their apprenticeship.
bullet point Pay may vary depending on your “status” as an apprentice. There is a general agreement that "employed" apprentices should be paid a minimum of £95 per week for a 35-hour week.
bullet point Further advice can be obtained from the minimum wage helpline on 0845 6000 678.
bullet point Some young people train with a business or organisation without being employed by it. If this is a programme-led apprenticeship (PLA) you might be entitled to an Education Maintenance Allowance (EMA) of £10, £20 or £30 a week. This depends on your household income so not everyone qualifies.
bullet point If you are doing e2e you should recieve the maximum £30 per week EMA.
bullet point For more about EMA ring the helpline on 0800 121 8989 or visit www.direct.gov.uk/moneytolearn.[/QUOTE]

Thermo · 22 Nov 2009

but that depends on you're definition of an apprentice. I think those rules apply to those on a recognized training scheme and apprenticeship. Someone just lending a hand to gain experience would not be classed a sa bona fide apprentice.

D_Hailsham · 22 Nov 2009

ajstoneservices said:
If you take on an apprentice then you must pay the correct rate according to their age.

Agreed, but the OP is not talking about taking on an Apprentice, which is an employee with a written contract of employment. He is talking about taking on an unpaid volunteer, similar to the volunteers in a charity shop. Provided there is no contract of employment the OP should be safe. He might be able to pay the volunteers reasonable expenses, e.g travelling costs.

In the end it would be better for the OP to ask his tax office.

ajstoneservices · 22 Nov 2009

Can you really circumvent the law in that way?. His insurers will treat his "trainee" as his employee and up his rate accordingly.

D_Hailsham · 22 Nov 2009

ajstoneservices said:
Can you really circumvent the law in that way?. His insurers will treat his "trainee" as his employee and up his rate accordingly.

It would come under the heading of "Third Party Liability", and as this is usually £millions, the premium should not be affected.

The OP needs to check this with his insurer.

Neither the OP nor the volunteer are trying to circumvent the law.

Thermo · 22 Nov 2009

most policies will allow for temporary employees for up to 60 days under employers liability insurance

ajstoneservices · 22 Nov 2009

Yes but add "trainee" and see your eyes water (full disclosure)

DH
My insurers have specific terms for "trainees" as do most other plumber/rgi's insurers.

D_Hailsham · 22 Nov 2009

ajstoneservices said:
Yes but add "trainee" and see your eyes water (full disclosure)

DH
My insurers have specific terms for "trainees" as do most other plumber/rgi's insurers.

It will all depend on the legal status of the volunteer worker. Is he an employee or not? Knowing how perverse bureaucracy is, the Tax man will say "no" and the insurance company, "yes".

One thing which has not been mentioned is the effect this voluntary work could have on any benefits the volunteer is receiving while he is out of work.

TonyW2 · 22 Nov 2009

If a volunteer for a charity is paid for the work, then they must be paid at least minimum wage and they become an employee.

If they work as a pure volunteer and receive no pay, they may be reimbursed for costs incurred by undertaking the activity (eg travel costs) at the lowest reasonable cost and with no element of surplus above that amount.
They still need to be insured.

Whether an employmemt contract exists is immaterial, as one is implied if any money is paid for the work activity.

Mw Roofline · 23 Nov 2009

TonyW2 said:
Alternatively you could carry on with your totally unacceptable, immoral and illegal system and actually get something sensible done.

Blimmin ell mate, talk about PC

We've all paid a few employees/subbies cash on the side. fair play the OP has asked the question and wants to do something about it, Don't flame him too much!

Goldspoon · 24 Nov 2009

I think he was joking... or I'll have to retract my thanks

Does having a free apprentice break the law?

Goldspoon

Goldspoon

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