SAN FRANCISCO (KCBS)— The San Francisco City Attorney has cleared 17 restaurants and reached settlements with dozens of others over allegations that they were collecting surcharges to pay for employee health care, but not actually providing any.

Deputy City Attorney Sara Eisenberg said the City has settled with 40 restaurants without filing a single lawsuit at the conclusion of the year-long investigation.

The controversy came to light when city officials accused restaurants of ripping off their customers and their workers with Healthy San Francisco surcharges that did not go towards payment for employee health care.

“We were able to reach settlements with dozens of restaurants that has resulted in over $2 million that is being paid directly to nearly 4,000 restaurant employees in San Francisco,” Eisenberg said.

Firefly was among the first of the 17 restaurants found innocent of any wrongdoing. Owner Brad Levy blamed the confusion on clumsy enforcement of what he called an awkwardly written law.

“The whole way that it was rolled out and enforced was bumbling at best, the end product is that more workers are insured; that workers in the city are better off and that’s ultimately a good thing,” he said.

The City Attorney said some restaurants simply had bad accounting practices, but the bottom line is thousands of workers will get money they’re owed, to help cover benefits.

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 This material may not be published, broadcast, rewritten, or redistributed.)


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