Penalty rates need updating, says Sumo Salad CFO Sumo Salad CFO Chris Batterham says penalty rates paid to staff such as Sam Moore, pictured front, can make opening stores on public holidays difficult. SUMO Salad kept one of its outlets closed on a recent public holiday because high penalty rates for workers would have meant making a loss, the fresh food franchise operator has revealed. Chief financial officer Chris Batterham told a GE Capital webinar on mid-market businesses that the store could have had to pay employees 2.5 times their normal hourly rates - double-time and a half. "It would have been a cost day," said Mr Batterham, who declined to identify the store or the state but made it clear the penalty rate system was a significant drag on his company in Australia. Sumo Salad is expanding into countries such as the US where such rates do not apply. "The world has changed, it's a seven day a week world now and we need to pay our staff accordingly," Mr Batterham, who most recently worked for a shopping centre group in Europe and before that at David Jones, said. The state manager called me to ask about how the relevant Act applied. We made our estimate of the likely cost of goods sold, then we calculated the staff cost at the 2.5 times penalty rate and the numbers didn't add up so we took the decision not to open," he said. Asked if the company would do it again, he said: "It's in our thoughts."