Union exposes apprentice levy “scam”

UK: The UK’s largest trade union claims that some large companies may be profiting by deducting the apprentice levy from workers’ wages.

The Unite union claims to have received a growing number of payslips from workers in different sectors including construction, which show that employment agencies and umbrella companies are deducting the apprentice levy from workers’ pay. The apprentice levy was introduced last year and companies with a payroll of over £3m are expected to pay 0.5% of the payroll costs to the HMRC, this money is then earmarked for apprentice training.

The union, has called for a crackdown on what it describes as a “loophole” being operated by “unscrupulous” companies, which could result in these organisations generating a profit from these “dubious” payments.

Although not illegal, provided the worker has agreed to the deduction, Unite describes this action as “highly immoral”.  It argues that if an agency or umbrella company charges their entire workforce the apprentice levy they will in fact be making an additional profit, as they don’t pay the levy on their first £3m of payroll.

“The most unscrupulous umbrella companies and agencies are deliberately undermining the apprentice levy by forcing workers to pay something which is supposed to be their responsibility,” said Unite assistant general secretary Gail Cartmail.

“In a double whammy not only are these companies offsetting what they should be paying they are potentially making a profit and lining their pockets through making deductions on the levy.

“The government must immediately look at this scam and introduce measures to prevent workers from being charged in this way.

“If the government fails to act, support and confidence in the apprenticeship levy will be further undermined.”