19 Apr 2014

Cafes have higher prices instead of surcharges

1:02 pm on 19 April 2014

The Restaurant Association says more cafes and restaurants are now increasing their overall prices to cover staff costs on public holidays rather than using surcharges.

Bars and cafes at the Viaduct Basin in Auckland.

Bars and cafes at the Viaduct Basin in Auckland. Photo: PHOTO NZ

It is 10 years since the introduction of the Public Holidays Amendment Act, which says employees must be paid time and a half on public holidays.

To cover costs, some businesses bring in a holiday surcharge of around 15 percent.

The Restaurant Association said about half its members use the surcharge and some others close on public holidays.

But president Mike Egan said some are covering the extra costs by slightly increasing their prices for the whole year.

The Commerce Commission says Easter Saturday and Sunday are not public holidays and surcharges cannot be charged.

General manager Kate Morrison said that when surcharges are applied, businesses must prominently advertise it and be honest about their reasons.