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BY FENIT NIRAPPIL
SAN FRANCISCO--Restaurants and other businesses in this food-loving tourist mecca collected almost $14 million dollars in extra fees last year from their patrons, as they sought to comply with the progressive city's landmark universal health care ordinance.
But an AP analysis of records showed that roughly 40 percent of that money hasn't been spent on their workers' health care.
The surcharges, which range from 3 to 5 percent and often appear in fine print on receipts, are one result of San Francisco's 5-year-old health care program, which includes some of the most far-reaching requirements mandated by any U.S. city.
The law applies to more than 4,000 businesses with as few as 20 part-time workers, from nail salons to international banks with local branches, requiring them to set aside for workers an extra $1 to $3 an hour for health care.
The city's mandate is unrelated to the federal health care law that takes effect in 2014 and will apply only to companies with 50 or more employees. They could face fines if they don't provide coverage. And the IRS will collect the money, minimizing the chances of gaming the system.
In San Francisco, the fees have become a vexing issue for local officials, labor leaders and restaurants, whose owners say they are doing their best to comply with what many consider to be a confusing law with an admirable goal.
City officials say the vast majority of businesses in San Francisco go beyond what's required to make sure their workers have health care. But Donna Levitt, who is head of the city's Office of Labor Standards and Enforcement, said self-reporting by the 5 percent of businesses with surcharges last year confirms the city's suspicion that the money doesn't always go to health care.
There was nothing on the books in 2011 that required businesses to spend all the health surcharge money they took in. But a new law took effect this year requiring them to use the money for its intended purpose, or face a consumer fraud investigation.