Unite, the UK’s largest union, is calling for an immediate
crackdown on a loophole being operated by unscrupulous employment
agencies and umbrella companies, which results in workers having
the apprentice levy deducted from their wages and could result in
these organisations generating a profit from these dubious
payments. Unite has received a growing number of payslips
from workers in different sectors including construction, which
show that employment agencies and umbrella...Request free trial
Unite, the UK’s largest union, is calling for an immediate
crackdown on a loophole being operated by unscrupulous employment
agencies and umbrella companies, which results in workers having
the apprentice levy deducted from their wages and could result in
these organisations generating a profit from these dubious
payments.
Unite has 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 £3 million are expected to pay 0.5
per cent of the payroll costs to the HMRC, this money is then
earmarked for apprentice training.
Although highly immoral to pass this cost on to the
worker, it is not illegal provided the worker has agreed to the
deduction. In reality although workers will be unhappy about having
the levy removed them their wages, most sign up in order not to
lose the work they have been offered.
However the double whammy is 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 £3 million of payroll.
Unite assistant general secretary Gail Cartmail
said: “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.
“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.”
