Furlough and Tronc

JoeBloggs72

I am upper management in a hospitality group. I have a contract for a set salary, but my employer chooses to pay some from themselves and some from Tronc.
this means I will now be getting around 33% of my salary rather than the 66% I should have got.
is this legal?
We have all been placed on furlough since mid March. All the hourly staff are getting 80% of minimum wage, and it’s not a big drop for a waiter or lower level chef, but for a manager it’s crazy. 

silvercar

Contracted salary only, which can include any tronc or employer pay if that is included in your contract.
80% of minimum wage is a hard budget to balance, whatever anyone else is or isn't getting.

JoeBloggs72

Thanks for your help

JoeBloggs72

Any legal people on here? My contract has a fixed rate and no mention of Tronc contributions. Surely the fact that a dodgy system is used to pay me is their problem not mine? 

PayrollGuru

Yes, this is very frustrating and hard on people in the industry. We’ve processed thousands of furloughed staff on behalf of employers in the hospitality industry. Troncs are a doubled edged sword. They only work, and provide the benefit of National Insurance savings, when they are not contractual. If they are contractual they would be pointless as they would be taxed and NI’d as would normal pay. The industry is petitioning 

Jeremy535897

PayrollGuru said:

Yes, this is very frustrating and hard on people in the industry. We’ve processed thousands of furloughed staff on behalf of employers in the hospitality industry. Troncs are a doubled edged sword. They only work, and provide the benefit of National Insurance savings, when they are not contractual. If they are contractual they would be pointless as they would be taxed and NI’d as would normal pay. The industry is petitioning 

Yes, that was my conclusion a few posts ago. I wonder just how many of these are genuinely paid by a separate troncmaster out of tips collected in the restaurant?

DataplanPayroll

We act as a Troncmaster for numerous clients. The appointment of an independent troncmaster ensures full compliance with HMRC's rules and guidance on the distribution of tips. It is my view that employers should NOT be using tips as a way of funding employees wages. It they are, the payments should be processed as 'normal' contractual payments subject to Income Tax and National Insurance Contributions. This would ensure that you are not in a position of reduced earnings in this time of furlough. The employer would pay your normal salary, tips are distributed in accordance with the rules of the tronc scheme. It is very sad that at this time of uncertainty, unscrupulous employers are using money that is not theirs, to reduce salary and supplement it with a 'guaranteed' payment of tips. My view is that if the payments are contractual, they should be reflected in your pay. The fact that the payments have not been reported to HMRC as employment earnings reflects on the furlough payment that HMRC will pay. Hopefully the Employment Act announced in the Budget will address the position, sadly this will not help your current predicament

JoeBloggs72

DataplanPayroll said:

We act as a Troncmaster for numerou mi s clients. The appointment of an independent troncmaster ensures full compliance with HMRC's rules and guidance on the distribution of tips. It is my view that employers should NOT be using tips as a way of funding employees wages. It they are, the payments should be processed as 'normal' contractual payments subject to Income Tax and National Insurance Contributions. This would ensure that you are not in a position of reduced earnings in this time of furlough. The employer would pay your normal salary, tips are distributed in accordance with the rules of the tronc scheme. It is very sad that at this time of uncertainty, unscrupulous employers are using money that is not theirs, to reduce salary and supplement it with a 'guaranteed' payment of tips. My view is that if the payments are contractual, they should be reflected in your pay. The fact that the payments have not been reported to HMRC as employment earnings reflects on the furlough payment that HMRC will pay. Hopefully the Employment Act announced in the Budget will address the position, sadly this will not help your current predicament

Great response.. 

In a nutshell they’ve not only been handling them wrong, in regard to using them for salaried management, but also mis-representing how they are distributed, as our menu says “all service charge goes to the staff in this restaurant”.
There would be enough money left in the pot to cover the government Tronc shortfall for these three months, but the company already spent it.

 Suffice to say I won’t be with them much after we re-open 

QueryGuy20

Hi,
I though this post may be the best place to ask.
Can my employer who owns multiple restaurants take a %/ fixed amount of the service charge/tips from each restaurant (before distributed to staff) and give it to the overall parent company for distribution to the staff who a contracted through the parent company and are not operational staff during any service.
Thanks. 

QueryGuy20

I maybe should have stated the restaurant(s) use the Tronc system with a troncmaster. So company owner "should" have zero input.