SF pizza shop settles with city: 4% health care surcharge didn't go to health care

Source: San Francisco Chronicle

Patxi's Chicago Pizza has agreed to spend $320,000 to settle a complaint from San Francisco officials that the restaurant chain did not follow the city's groundbreaking and controversial health care law, shortchanging employees in the process.

Under the settlement agreement, announced Sunday by City Attorney Dennis Herrera, Patxi's will increase by about $100,000 the amount it spends on employee health care this year.

The restaurant chain also will distribute about $205,000 among 115 current and former employees who were eligible for health care benefits between 2009 and 2011 but didn't receive any. Patxi's also will pay $15,000 in penalties to the city.

The settlement came after a city investigation found that Patxi's had been collecting a 4 percent surcharge from customers to cover the costs of the health care law but was using most of the money for other purposes. The company agreed to change its practices without the city resorting to a lawsuit.

Read more: http://www.sfgate.com/bayarea/article/Pizza-firm-S-F-settle-over-health-costs-4190700.php