The growing scale of the rip-off came to light when the Sector Skills Council and Industry Training Board for the construction industry issued a statement advising victims to take legal action.

CITB-ConstructionSkills said that some contractors were illegally saddling extra costs on smaller subcontractors by passing on their levy payments.

Ten specialist and main contractor associations have signed up to the campaign to rid the industry of the unfair practice.

In a joint statement issued today to highlight and discourage this bad practice, the partnership points out some employers were labelling the charges: ‘deduction for CITB levy’ or ‘amounts in respect of CITB levy’.

In some cases the deductions had been found to be set at higher rates than the CITB-ConstructionSkills levy.

Chief Executive of CITB-ConstructionSkills, Mark Farrar, said: “CITB-ConstructionSkills is the body appointed by Parliament to raise and collect the Industrial Training Levy from employers in the construction industry under the Industrial Training Act.

“The Act does not give authorisation for employers to make deductions from any amounts paid to a labour-only sub-contractor or other worker.”

He advised: “If your employer is making these types of deductions without your consent, you may wish to seek independent legal advice.

“CITB-ConstructionSkills is working to deliver the right skills for economic growth locally and nationally and the levy we collect provides the funds to help employers up-skill their workforce and make their businesses succeed and grow.”

The levy money raised is used to provide training grants and other benefits which help employers train their staff and develop their businesses.

Last year, 19,058 employers benefited from £113m of grant funding.