Part 2 of Reporter Doug Sovern’s KCBS Cover Story Series – Healthy San Francisco

SAN FRANCISCO (KCBS) – San Francisco authorities said they will not press charges against one of the restaurants suspected of defrauding customers and depriving employees of health care.

But other restaurants are still on the hook and the controversy is triggering debate over what many call a confusing health care law, Healthy San Francisco.

The story headlines screamed scandal: restaurants charging customers extra to comply with Healthy San Francisco, but then not spending that surcharge on their workers’ health care.

But Brad Levy, chef-owner of Firefly in Noe Valley, said it’s not that simple.

“The way that this law was set up, there was so much gray area, unanswered questions and guesswork on the part of the restaurants in trying to do the right thing,” said Levy. “It seemed like it was set up for this kind of kerfuffle.”

Assemblyman Tom Ammiano, who wrote the original law as a San Francisco Supervisor in 2006, doesn’t buy that.

“I’m sorry, they’re responsible. I find that a cop-out,” Ammiano said. “I think that there was a lot of resentment about this program. I don’t have any compassion for their whining about this issue.”

Current Supervisor David Campos, who amended the law, said the vast majority of restaurants seem to have figured it out just fine.

“Most businesses are following the letter and the spirit of the law and they are playing by the rules,” Campos said. “And to the extent that a small minority of businesses aren’t, it’s not fair to the vast majority that are.”

Levy admits Firefly did take in more in surcharges than it paid out to employees, but only because workers didn’t use all the health care money he set aside for them. “It sits in an account on our books, waiting for them to make claims against it,” he said.

City Attorney Dennis Herrera said Levy is telling the truth. He took a look at Firefly’s books and it’s the first restaurant in this probe cleared of wrongdoing.

“We looked at what they had to say and quite frankly, they were right,” Herrera said. “We don’t have any interest in going after businesses that don’t deserve to be on the list. Firefly made it clear that they deserve to be cleared and they will be.”

One restaurant, Patxi’s Pizza, has settled, paying back employees more than $200,000. The rest of the restaurants Herrera is investigating have until April 10 to be exonerated like Firefly, admit wrongdoing and pay up or face consumer fraud charges. But the question remains – does the law need fixing?

Thursday: In Part 3 of Doug Sovern’s KCBS Cover Story series, he’ll report on the deadline approaching for restaurants being investigated and how many owners claim the law is flawed and needs to be amended – and why Mayor Ed Lee may agree with them. Airing at 6:20 a.m., 8:30 a.m., 12:20 p.m., 4:20 p.m. and 9:20 p.m. on 740 AM & 106.9 FM.

(Copyright 2013 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)


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