Top San Francisco restaurants facing exposure over health surcharge
San Francisco restaurants that have been cheating their customers and employees — charging diners for city-required healthcare coverage that they aren't fully providing to workers — will finally be exposed in the coming weeks, with some notable names in foodie circles among the likely culprits.
City Attorney Dennis Herrera is working on settlements with dozens of restaurants that responded to his investigation and partial amnesty offer, which had an April 10 deadline. His effort augments the complaint-driven enforcement actions by the city's Office of Labor Standards Enforcement, which has collected millions of dollars for thousands of employees of negligent local businesses in recent years.
At issue is the Healthcare Security Ordinance, the landmark 2008 law authored by then-Sup. Tom Ammiano that requires San Francisco businesses to provide a minimal level of healthcare benefits to their workers. Businesses are also required to report spending and surcharge figures to the OLSE annually, with the next report due April 30.
Last year's data show celebrity chef Michael Mina's Mina Group LLC — which includes the restaurants Michael Mina, RN74, Bourbon Steak, and Clock Bar — to be the top violator, collecting $539,806 in surcharges from customers and spending just $211,809 on employee healthcare.
Herrera used that list to ask more than 70 businesses to show they are in compliance with the law or reach discounted settlements now to avoid punitive fines or criminal charges later, and Herrera told us he received 60 responses and had his inquiry snubbed by fewer than a dozen.
"It's too early to talk about how large a recovery we'll be getting for workers, but I'm pleased with the response rate," Herrera told us. He refused to estimate how many of the respondents were found to be in violation, but in an April 11 message to reporters covering the issue, his spokesperson Matt Dorsey wrote, "Based on our investigation so far, we anticipate that the majority of these establishments will be required to pay money to compensate their workers."
WHAT THE FIGURES SHOW
The Guardian contacted many of the restaurants that topped the OLSE list. Some wouldn't respond, some said they've changed their policies since the controversy erupted, and some wouldn't talk until after a settlement is announced — including the Mina Group. That seems to indicate they're about to pay for past violations.
Nicole Kraft, who handles public relations for the Mina Group, responded to Guardian inquires by writing, "I wanted to let you know that Mina Group will soon be releasing a joint statement with the City Attorney's office, which should answer many of your questions. We'll be sure to send it your way ASAP." [UPDATE 4/29: Mina Group settled its case for $83,617.]
Sources in the City Attorney's Office say settlements with as many as 10 restaurants that admit clear violations of the HCSO could be announced in the next week or two, while another 10 or so have provided data showing they are not in violation. The rest are more complicated and could take weeks or months of investigations, which are being led by Deputy City Attorney Sarah Eisenberg.
"There are going to be some that are given a clean bill of health," Herrera told us. Herrera also told us that his investigation is just getting started and that it will look at businesses that haven't made required annual reports to the OLSE. "When we get to a place where we're announcing settlements, we'll have more to say," he said when asked for details and dimensions of his investigation.