Holiday surcharge warning (+poll)

By Genevieve Helliwell


Local businesses are being warned not to mislead their customers on the surcharge debate that has divided the industry.

On Good Friday and Easter Monday, Tauranga business owners will have to pay their staff time-and-a-half and time off in lieu when they work a public holiday, under to the Holidays Act 2003.

The Commerce Commission has warned business owners Saturday and Sunday are not public holidays and they should not charge extra on these days. If they do, they must be truthful about the reason for any surcharge, Kate Morrison of the Commerce Commission said.

"It would be misleading under the Fair Trading Act to claim a surcharge on Saturday and Sunday over Easter and represent that this is due to the Holidays Act, when those days are not public holidays," Ms Morrison said.

"A business can charge what it likes, and consumers will choose whether to pay or to go elsewhere. But the reason for any surcharge must not mislead."

Hospitality New Zealand Waikato/Bay of Plenty regional manager Alan Sciascia said it was up to each business whether to impose a surcharge.

The bigger issue was whether it would be financially viable for business to be open and he estimated about a third of local businesses would not open on Good Friday or Easter Monday.

"It's very expensive to open on a public holiday because the cost of labour goes up immensely. Businesses have to pay their staff two-and-a-half times their normal wage and these costs have to be recovered somehow," Mr Sciascia said. "It's a huge deal, particularly for those in the hospitality industry."

Staff costs were at least 30 per cent of running a restaurant, which meant costs were significantly higher on public holidays.

According to the Commerce Commission, an employer may be entitled to impose a surcharge on any day where it has to pay employees more than a normal working day. Businesses are free to determine the retail price for goods and services. But if businesses use public holidays as a reason for applying a surcharge, that surcharge needed to accurately reflect the costs of opening to avoid the potential of misleading customers.

Owner of the Mediterraneo Cafe (The Med), Jo Brown, said there would be no surcharge at the downtown Tauranga cafe but there would be one at Elizabeth Cafe and Larder, which she co-owned. Despite losing about $500 on a public holiday, Ms Brown said the reason there was no surcharge at The Med was to reward loyal customers.

"I used to do a surcharge but never to the regulars out of loyalty and a way to give back to those who support us so with 90 per cent of customers being regulars, it wasn't worth having one and we haven't for the past three to four years," Ms Brown said.

Peter Ward, of Harbourside restaurant, and Grindz cafe co-owner Steve Graham said their businesses would operate without a surcharge at Easter, although Grindz cafe would be closed tomorrow.

A spokesperson from Astrolabe Brew Bar in Mount Maunganui said a surcharge was necessary and the bar would operate with a 15 per cent surcharge.


 

- BAY OF PLENTY TIMES

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