Surcharge confusion likely for year’s public holidays
Paying 15 per cent extra to eat out is not most people’s favourite part of a public holiday, but get ready to be asked to do exactly that this year.
Most moveable public holidays fall on the weekend this year, and will be Mondayised.
New Year’s Day was a Friday, but January 2 was a Saturday and was Mondayised so people would not miss out on a public holiday. Waitangi Day, Anzac Day, Christmas Day and Boxing Day will all be a Saturday or Sunday.
Businesses can apply a 15 per cent surcharge on a public holiday to cover the cost of paying their staff time-and-a-half, as well as providing a day in lieu. However, they have to make it clear there is a surcharge before a customer orders, and what it is for, according to the Commerce Commission.
Dundas Street Employment Lawyers partner Susan HornsbyGeluk said the issue gets confusing when a public holiday falls on a weekend.
‘‘If cafes and restaurants employ both week-day staff and weekend staff, they could potentially be affected by additional staff costs across two days for each holiday,’’ HornsbyGeluk said. ‘‘This is because for weekend staff who work on a Saturday, the Saturday is observed as a public holiday because that is the day they would otherwise normally work.
‘‘However, for weekday staff, who would not normally work on a Saturday, the Monday is observed as their public holiday.’’
Hospitality NZ chief executive Julie White said the number of public holidays falling on a weekend this year was unusual.
That was likely to create extra confusion about the surcharge, she said, with restaurants able to charge extra on a day that was not the actual public holiday.
‘‘Paying time-and-a-half and a day in lieu, it’s really quite an expensive choice [to stay open],’’ White said.
‘‘Feedback from members is how costly it is to remain open on a public holiday. Some holidays when they land they don’t create any extra revenue.’’
For some hospitality businesses, wages made up about 30 per cent of operating costs, White said.
‘‘Time-and-a-half can blow that out to 40, 45 per cent of the cost of running that business on that particular day.’’
Many hospitality businesses were doing quite well financially considering the Covid-19 pandemic, she said, but the most vulnerable ones were in the central city.
The public holiday surcharge was optional, White said.
A regular customer of Auckland restaurant El Sizzling Chorizo said she wanted to go to the restaurant on
Monday, December 28. However, she changed her mind when she saw a sign saying there was a 15 per cent surcharge.
The restaurant was closed on December 25 and 26, according to its Facebook page. However, with Boxing Day falling on a Saturday, it meant that Monday was still a public holiday for some staff.
The customer, who did not wish to be named, said the 15 per cent surcharge was unfair. ‘‘I went there on December 28 and they had it on display in a sign, and I refused to eat there and pay that on a non-public holiday day.’’
El Sizzling Chorizo duty manager Tomas Viola said normally people did not complain about the surcharge.
‘‘Normally there’s no problem, we explain it’s a public holiday and the reasons. I’ve been here for four years, almost five, there’s been a surcharge on public holidays as far as I remember.’’
A Commerce Commission spokeswoman said a business risked breaching the Fair Trading Act if it applied a public holiday surcharge on a day that was not an official public holiday.
If a court ruled the act had been breached, a company could be fined up to $600,000, and an individual up to $200,000 for each offence.
Diners who thought they had been misled about the reason for a surcharge could make a complaint to the Commerce Commission.