City Attorney Makes It Rain $2.1 Million: Restaurants Who’d Run Afoul Of Healthy SF Rules Reach Settlement

San Francisco’s city attorney announced today that all restaurants that had faced potential lawsuits for failing to comply with the city’s “Healthy San Francisco” ordinance have settled with his office or been cleared of wrongdoing.

City Attorney Dennis Herrera said 57 restaurants faced possible litigation for discrepancies between the amount of money they collected via surcharges for employee health care and actual expenditures by the business.

The Healthy San Francisco program, enacted in 2006, permits restaurants to add a surcharge onto bills in order to help provide health insurance to their employees.

Herrera said in January that some restaurants collected the surcharge but did not spend all of the money collected from it on health care.

The city attorney offered an amnesty program in which restaurants could settle with the city by paying 50 percent of what was collected in the surcharge but wasn’t spent on employee health care.

The offer led to 38 settlements with restaurants for about $2.1 million that will be distributed to nearly 4,000 employees at the various dining establishments.

Two other restaurants reached non-monetary settlements to ensure compliance with the ordinance, according to the city attorney’s office.

An additional 17 businesses were cleared of wrongdoing after investigators determined no surcharge-related fraud had occurred, but rather accounting or reporting errors by the restaurants.

“The success of this enforcement program owes in large part to good faith efforts by restaurants to honor the intent of fees paid by their customers, and to do right by their employees,” Herrera said in a statement.

“I’m grateful to these businesses for understanding our duty to enforce the law even-handedly, and for working cooperatively with us,” he said.

Herrera’s announcement of the settlements came via a video segment (viewable below) for his new social media program “Case-by-Case,” which provides updates on his office’s high-interest cases.

Dan McMenamin, Bay City News

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