Hospitality staff missing out on up to 40% of income from tronc payments

Analysis from hospitality software provider Fourth found more than half of the hospitality workers (60%) it surveyed received tronc payments in 2019. These payments, a sum divided up from customer tips, made up on average more than 25% of these workers’ income.

The Government’s Coronavirus Job Retention Scheme means that companies can furlough their workers, with 80% of their basic monthly wages covered by the scheme – but no allowances are made for tip payments, otherwise known as tronc schemes.

Reduced earnings

Fourth concluded that the majority of furloughed hospitality staff have only been receiving an estimated 60% of their usual wage. It said because its data sample only includes tronc payments made digitally and not cash tips, many furloughed workers could be receiving even less than this percentage.

It found that, on average, tronc makes up a higher percentage of the basic pay for salaried workers (28%) than those paid on an hourly basis (24%). 

It comes as a coalition of trade bodies representing pubs have called on the Government to maintain its current level of subsidising of workers’ wages into the autumn. 

UKHospitality chief executive Kate Nicholls said: “The Coronavirus Job Retention Scheme has been a vital lifeline for employees and employers – providing an income while allowing businesses to retain their valued workforce. It is time for an approach that is #Fair4Hospitality employees – with access to their full earnings under furlough and extension of full furlough until their employer is back to full service.”

The British Beer & Pub Association (BBPA), British Institute of Innkeeping (BII) and UKHospitality (UKH) wrote to Chancellor of the Exchequer Rishi Sunak imploring him to maintain the furlough scheme at the current 80% payment level until October.​

Jobs on the line

Fourth senior vice-president James England said: “In addition to graphically illustrating what an important component tronc is for many hospitality workers’ pay, these findings also demonstrate why a tapering off of support could really hurt the finances of hospitality workers as many of those furloughed aren’t receiving 80% but more like 60% of their normal earnings. 

“While it’s an extremely challenging time, optimism is returning to the industry; many hospitality businesses are developing their reopening plans in line with Government guidelines and timings and retention of their key staff will be crucial to successfully reopening.”

He said further reductions in payments to furloughed employees could result in a career in the sector not being financially viable and both current and prospective members of the trade turning to other industries for work.

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