The latest figures from Fourth, the leading global software provider for the hospitality sector, reveal that Tronc payments (tips) make up on average more than 25% of hospitality workers’ basic pay, for the significant cohort that receive it.
The data, which has been aggregated from analysis of over 120,000 workers across 200 companies in the restaurant, bar, hotel and QSR industries, reveals that 60% of all workers in the sample received Tronc payments during 2019, including both back of house (BOH) and front of house (FOH) roles.
The insight from 2019 coincides with the industry’s continued interest in having the government recognise Tronc payments in its Job Retention Scheme (JRS). The far-reaching scheme has seen over eight million workers furloughed, with the government paying 80% of their basic monthly pay, up to the value of £2,500.
The findings mean that the majority of furloughed hospitality workers are earning significantly less than 80% of their normal earnings. Because they no longer receive the average addition of 25% Tronc to their monthly pay, they are in fact only receiving 60% of their usual wage. With the government expected to scale back its level of support for furloughed workers over the coming months, this percentage could fall further.
The data also reveals 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%). Further to this, the data set only includes Tronc payments made digitally, and not cash tips. Taking this into consideration, it suggests that many hospitality workers on the JRS could be receiving less than 60% of their normal monthly wage.
Using an example from the data set and a blended Tronc figure across salaried and hourly paid workers, an employee earning £1,850 over a four-week period in 2019, would receive Tronc payments of £438. As a result, the basic pay that the employee received on furlough for this four-week period would rise from £1,129 to £1,480 if Tronc was to be included in the furlough payment.
Kate Nicholls, CEO, UKHospitality, said, “The 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.”
James England, Senior Vice President at Fourth, 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.
“Whilst 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.
'There are concerns that further reductions in payments to furloughed staff could mean that a career in hospitality is not financially viable in the current environment and could result in significant numbers of people being forced to look at other industries for employment.”
(source: Fourth, image: pexels)
