Restaurants Must Now Keep Larger Healthy S.F. Reserve Fund

The surcharges won't be going away anytime soon.

Mayor Ed Lee signed off on some legislation that narrowly got approved by the Board of Supervisors yesterday which will require restaurants to keep in reserve two years worth of healthcare funds (about $8,500) per full-time employee at all times. The new law came about after a Wall Street Journal exposé that showed how most big S.F. restaurants were pocketing the majority of the funds they collected from those Healthy S.F. surcharges, and the money was not going to its intended purpose: to provide healthcare for service-industry workers. Restaurateurs and other businesspeople balked at changing the law, because they were essentially using the surcharges as a new revenue stream to off-set other city-required expenses, like paid sick leave and S.F.’s higher than average minimum wage.

The surcharges won't be going away anytime soon.

But the vote passed six to five yesterday, closing the loophole not only for restaurants but for all businesses, and surprisingly David Chiu — who earlier had courted some votes from restaurateurs by opposing the change — voted for it. One of the supervisors who voted against it, David Campos (who was the first to propose the change in the legislation), did so because he says it "doesn’t go far enough," so this issue may not be dead.

Mayor Lee also is issuing an executive order that all city workers be educated on access to health benefits, but this obviously doesn’t solve the problem of all restaurant workers — particularly those kitchen workers and busboys who don’t speak a lot of English — getting wise to the fact that these funds are legally available to them if they fill out a few forms. Chances are most of them still won’t, and restaurants will still be pocketing a large chunk of these unused funds.

Mayor Lee, Supervisors Wrap Up Healthy SF Loophole [SFist]
San Francisco Health Accounts Growing [Examiner]
Earlier: Restaurants Adding Health-Care Surcharges to Checks Aren’t Using Funds for Health Care