San Francisco’s five-year-old ordinance requiring companies to set aside funds for health care caught thousands of businesses in its net, and many restaurateurs responded by adding “health care surcharges” to their checks. But a lot of that money hasn’t been going to employees.
The law requires businesses with 20 or more part-time employees to set aside an extra $1 to $3 an hour for employee health care. In many cases, the fees were passed onto restaurant customers in the form of a three- to five-percent surcharge in the fine print of their receipts. According to The Washington Post, nearly $14 million was collected in extra fees, but roughly 40 percent of that money hasn’t gone towards its intended purpose — at least not yet.
Donna Levitt of San Francisco’s Office of Labor Standards and Enforcement said the city had been suspicious that the surcharge money wasn't always being properly utilized — but several restaurants that collected extra money deny any shady activities and say their workers didn’t opt to use the money. Some say the funds are still hanging out, waiting for them to be utilized.
Michael Mina’s RN74 and Michael Mina restaurants took in $540,000 in health surcharges from customers last year, for instance, and report paying out only $211,000. The company says it’s been holding mandatory meetings trying to get employees to apply for reimbursement of medical expenses. “Why they are not all excited about it like we are, I don’t know,” said Mina Group controller Paula Kaduce.
The Blue Plate stopped charging customers for health fees after it collected $40,000 in 2011 and only $500 was claimed.
“No one really wants to feel like we are collecting money or charging guests in a way that is irresponsible or secretive,” Blue Plate co-owner Jeff Trenam told the Associated Press. He theorized that the low claims were because his employees were young and healthy. He also said the funds were still there, and would be used for future health care expenses.