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Civil grand jury says restaurant surcharges and HRAs leave workers short; city officials differ on whether 2012 amendments fixed loopholes
Summary
The San Francisco civil grand jury found that some restaurants collected surcharges intended for employee health care but did not spend the funds on employees; OLSE, the mayor's office and some supervisors said new 2012 ordinance amendments improve reporting and outreach but resource and verification gaps remain.
The San Francisco civil grand jury told the Board of Supervisors’ Government Audit and Oversight Committee that city enforcement and employer practices allowed some businesses to collect surcharge money intended for employee health care while reimbursing little or none of it to workers.
Mario Choi, pro tem of the 2011–12 civil grand jury, said the jury’s investigation found it was “really unclear who’s actually benefiting from Healthy San Francisco” and that its survey identified restaurants collecting surcharges yet reimbursing employees little or nothing. The report recommended eliminating health reimbursement accounts (HRAs) in favor of the city option and urged the District Attorney to investigate possible consumer fraud.
Supervisor David Campos, who requested the hearing, said the grand jury and the Office of Labor Standards and Enforcement (OLSE) independently confirmed concerns his office first raised in 2010: employers can restrict HRA usage, workers often do not access the funds, and some businesses…
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