Service charges, tips and tronc payments will not be included as part of the Covid-19 Job Retention Scheme, with UKHospitality calling on the government to reconsider to protect the livelihoods of many workers in the sector.
Last week the government published guidelines on how employers could claim up to 80% of wages for furloughed staff, which included overtime, wages and commission payments, but did not cover tronc payments which often make up a significant portion of people’s earnings.
UKHospitality chief executive Kate Nicholls said the decision was ‘incredibly disappointing’ and that there was ‘no reason’ not to include these payments in the scheme.
“It is incredibly disappointing that the Government has seen fit to exclude tronc payments from people’s earnings,” she says. “HMRC will have evidence that employees are paid tips through a tronc, so there seems no reason not to include it in the Job Retention Scheme.
“This is taxable income that team members have earned. Excluding it from the scheme means that furloughed employees will receive less money to see them through this crisis. Money they should be entitled to.
“Hospitality employees put in a huge amount of hard work to earn their tips, often going above and beyond to give customers a fantastic experience. At such a difficult time for the country, people’s hard work should be acknowledged, and those people should be supported. Not doing so only risks putting additional, unnecessary pressure on the welfare system.
“Hospitality businesses are doing their best to support employees during extraordinarily difficult times. But with zero revenue and persistent demands on cash from landlords and others, there is only so much they can do. Including tronc payments in the Job Retention Scheme would give more people some much-needed support, and we hope the Government reconsiders.”
Last month Chancellor Rishi Sunak announced that the grants will cover up to 80% of the salary of retained workers up to a total of £2,500 a month, though employers can top up salaries further if they choose.
The scheme will be backdated for wages from 1 March and will be open initially for at least three months, with Mr Sunak revealing there will be “no limit on the amount of funding” for the scheme.