The Trades UNion Congress (TUC) has called on the government to take urgent action after official figures revealed that three in ten (29 per cent) apprentices were paid less than the legal minimum wage in 2012.
The Apprenticeship Pay Survey, published this afternoon by the Department of Business, Innovation and Skills, shows that the number of apprentices paid below the correct minimum wage rate increased by 45 per cent in 2012.
However, in some industries, such as children's care, underpayment shot up by two-thirds (65 per cent).
Seven in ten (69 per cent) hairdressing apprentices were paid less than the legal minimum wage in 2012.
TUC General Secretary Frances O'Grady said: "These findings are shocking and show how many apprentices are currently seen as little more than cheap labour.
"Apprentice exploitation is getting worse across the board. In some industries, such as hairdressing, abuse has become endemic. Ministers must launch investigations now into this abuse.
"This survey also reveals a number of systematic failures in the way apprenticeship pay is being monitored. There are plenty of bad bosses who have deliberately cheated young workers. And it appears many businesses do not understand how minimum wage rates work.
"Unless the government does more to make companies aware of their responsibilities, as well as naming, shaming and persecuting rogue employers, many apprentices will continue to be exploited."
In its submission to the Low Pay Commission, the TUC has called for the current apprenticeship rate of £2.68 an hour to rise significantly, and for the gap with the 16-17 year-old minimum wage youth rate (£3.72) to close.
The TUC believes the current apprenticeship rate is far lower than is necessary, and that as the economy recovers it needs to rise. (http://www.ekklesia.co.uk/node/191630
It also believes there is a strong case for apprentices over the age of 24 to be paid the full adult national minimum wage rate of £6.31 an hour, which would reduce confusion and complexity for employers as well as ensuring more people benefit from a fairer wage.