Up to 100,000 workers falling through furlough cracks

Linda J. Dodson

Meanwhile, low-paid waiters and bar staff who rely on tips as part of their regular income are also being short-changed by the scheme. 

The hospitality industry has been among those hit hardest by the shutdown, with four in five workers already furloughed by April 5 as cafés, restaurants and bars across the country were forced to close according to the ONS. 

Thousands of employees in the sector rely on ‘tronc’ – a special pay arrangement used by employers to distribute tips, gratuities and service charges to staff – for up to 40pc of their income.

But updated Government guidance this week said this money cannot be taken into account when calculating furlough payments. 

Kate Nicholls, chief executive of UKHospitality, said tronc income should be included when calculating payments under the furlough scheme.

She said: “Staff earn tips through hard work and skilled service, and should not be put at a disadvantage at such a perilous time for both businesses and employees.   

“Money paid into a tronc scheme is a taxable earning – there is a record of it already and the Treasury has taken its share. Employees should therefore be entitled to feel the benefit of their hard work when the need is most dire.”

Almost 23,000 people have signed a petition on website Change.org calling for the Chancellor to extend the scheme to take account of tronc payments. 

Some low-paid workers have been dealt a double blow as the 6.4pc rise in the national living wage to £8.72 an hour on April 1 will not be taken into account if they were furloughed before that date. 

A Treasury spokesman said the job retention scheme was just one part of the steps taken to support the economy. He said: “This includes targeted support for the hospitality sector with business rates holidays, VAT deferrals, eviction protection and over £6bn worth of cash grants of up to £25,000 for eligible firms.”

Meanwhile, credit ratings agency Moody’s said the Government’s measures to support businesses, including grants, business rates holidays and state-guaranteed loans will protect restaurants’ and pubs’ liquidity. 

David Beadle, senior credit officer at Moody’s, said: “While the immediate revenue hit that UK restaurant and pub companies suffered from coronavirus has eroded their credit quality, government relief measures will help them minimise cash burn during the closure period.”

“However, social distancing measures will likely delay a return to pre-crisis trading levels, which may also be held back by weak consumer sentiment.”

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