City Attorney Dennis Herrera says restaurants are required to report how much they've collected and spent on health care for their employees and a few of them appear to be cheating.
"These establishments that imposed surcharges on their customers for the cost of complying with San Francisco's universal health care law but that used little or none of those funds to actually provide health care benefits to their employees," Herrera said.
Diner John Bischoff says the first time he saw the charge he thought it was a good thing.
"That the city is progressive, right, and it's trying to meet a need," he said.
But the city attorneys in one year, a third of the money collected, $5 million, wasn't spent on healthcare. He is sending out letters to more than 50 restaurants letting them know they're the target of an investigation.
"Worst offenders must remit any amounts unredeemed by the workers to the city and county of San Francisco to fund future enforcement of health care and other consumer laws," Herrera said.
Assm. Tom Ammiano, D-San Francisco, authored the Healthy San Francisco program and calls the cheating criminal.
"You know that's larceny, you know that is not ethical and certainly doesn't help the reputation of restaurants here in San Francisco," he said.
The city won't name the restaurants under investigation; Herrera says he wants to give them amnesty if they come clean and pay what they owe. But the head of the Golden Gate Restaurant Association says Herrera is relying on reports filled out by the restaurants themselves and the information is suspect.
"I would say about 90 percent of the people I've talked to misreported their form; they just didn't know how to complete it, they didn't include all of the health care costs that were associated with their business that they should've included and I think there are going to be a lot of people who can show that it was just a reporting error," Ron Black said.
Herrera should be done with his investigation in 90 days.