Overview

The Training Wage Bill proposes a new "training wage," exempt from the national minimum wage, for individuals in formal training programs. This lower wage would apply only to those employed under written contracts explicitly stating their training wage entitlement and outlining a commitment to relevant skills training from their employer.

Description

This bill amends employment law to create a legal exception to the national minimum wage.

Key Provisions:

• Training Wage Exemption: Individuals in training programs under written contracts specifying a training wage would be exempt from the national minimum wage legislation.
• Contractual Requirements: Contracts offering a training wage must include a commitment to provide employer-sponsored training in skills relevant to the employee's job.
• Geographic Scope: The bill applies to England, Wales, Scotland, and Northern Ireland.
• Immediate Effect: The Act comes into force on the day it is passed.

Government Spending

The bill's impact on government spending is not directly stated in the provided text. However, it could potentially reduce the administrative costs associated with enforcing minimum wage legislation in situations where training wages are being lawfully paid. Furthermore, it might lead to indirect savings through increased employment, as businesses might be more inclined to hire trainees if they could offer a lower wage. Exact figures are unavailable.

Groups Affected

• Trainees/Apprentices: This group would be directly affected, potentially benefiting from employment opportunities but at a lower than minimum wage rate. The long-term impact on their earnings and career prospects is uncertain.
• Employers: Employers might see reduced labor costs, potentially enabling them to hire more trainees. However, they would also face compliance obligations regarding the content of training contracts.
• Minimum Wage Enforcement Agencies: These agencies may experience a shift in their workload, as fewer cases of minimum wage violations would potentially arise from those employed under training wage contracts.

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