New research finds childcare has poor record on minimum wage

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Childcare bosses are among the most likely not to pay the minimum wage, two recent reports have found.


Childcare apprentices, and childcare employees generally, are more likely to be paid less than NMW, two reports have found

A survey into apprentices specifically found that 'children’s care' apprentices were the second most likely group to be paid below the minimum wage.

Over one in 4, or 27 per cent, were paid less than the legal apprenticeship rate.

The research, from the Department of Business, Energy and Industrial Strategy last month, found that only hairdressers fared worse. The report also flagged a link between non-awareness of the national minimum wage and non-compliance with it.

Meanwhile, the United Kingdom Labour Market Enforcement Strategy report, also out last month, echoed the findings. Childcare employees have the second highest rate of underpayment of the national minimum wage of all the low-pay sectors, again behind hairdressing and beauty. It also found that small businesses were the worst offenders.

Sir David Metcalf, director of labour market enforcement, and author of this report, has called for better resources to help enforcement officials crack down on rogue bosses to ensure more are punished, and will be launching a consultation into how bad employment practices can be tackled.

The news of underpayment of the NMW is ‘disappointing and concerning’ says Neil Leitch, chief executive of the Pre-school Learning Alliance.

But while it was ‘very clear’ no childcare provider should be paying their staff less than is required by law, he said it is ‘important to recognise the incredibly difficult situation that many providers are finding themselves in’.

‘While minimum wage requirements continue to rise, early years funding has remained stagnant for many years,’ he said. ‘Even with additional funding provided by government this year, childcare providers in a quarter of local authorities across England have actually endured a real-terms cut in funding over the past five years. It’s little wonder, then, that childcare remains one of the lowest paid sectors of all employment industries.’

BEIS report findings

When it comes to childcare apprentices, rates of pay are among the lowest and have stagnated over the past two years, the BEIS survey found.

The report looked at apprentices on a composite ‘Children’s Learning and Development and Well-being framework’, referred to as ‘children’s care’, which includes childcare apprentices.

It found average pay for children’s care apprentices was £5.04 per hour in 2016 for level 2 and level 3 apprentices, an increase of just 2p on 2014. Only hairdressers were paid less, and the average level 3 hourly rate for apprentices across all sectors was 46 per cent higher, at £7.37.

The data, which looked at apprentices on a variety of frameworks across England, Scotland and Wales, also found that just 28 per cent of apprentices under the children’s care framework receive at least a day of formal training per week, one of the lowest rates in the survey. Hairdressers, electro-technical and construction apprentices faired better with between 69 per cent and 75 per cent accessing training. A new 20 per cent ‘off the job’ training rule for apprenticeships came in this May and is a condition of funding.

According to the BEIS, the frameworks were, for England: ‘Child Development and Well Being’, Scotland: ‘Children's Care, Learning and Development’, Wales: ‘Children's Learning and Development and Well Being’, ‘Supporting Teaching and Learning in Schools’ and ‘Learning and Development’.

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