SAN FRANCISCO (AP) — Dozens of San Francisco restaurants are under investigation for exploiting a new city program by keeping customer surcharges instead of spending them on employee health care.
City Attorney Dennis Herrera announced Friday that the offending restaurants have until April 10 to spend at least half the fees collected on employee health care or face consumer fraud lawsuits.
Herrera didn't name any of the restaurants under investigation. He said that "several dozen" restaurants consider to be the worst offenders were sent "target" letters on Friday informing of the offer to avoid litigation.
City officials reported that only about one-third of the $14 million collected in surcharges in 2011 was used for health care.
The city requires businesses to set aside an extra $1 to $3 an hour for worker health care.
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