SF operators reject city's health care compromiseSF operators reject city's health care compromise

Lisa Jennings

SAN FRANCISCO The Golden Gate Restaurant Association on Wednesday rejected an offer by San Francisco officials to temporarily freeze employer fees if the restaurant group would drop its lawsuit challenging the city’s universal health plan.

The impasse comes as the June deadline looms for the GGRA’s planned petition to the U.S. Supreme Court seeking a hearing of the group’s challenge of the city’s universal health plan. The lawsuit contends that mandatory employer fees under the plan violate the federal Employee Retirement Income Security Act, or ERISA.

Mitch Katz, San Francisco’s director of public health, first reached out to the GGRA last week, initially discussing the possibility of a tip credit that would allow restaurant operators to pay tipped workers the state minimum wage rate of $8 per hour, rather than the city’s rate of $9.79, said Kevin Westlye, GGRA’s executive director.

Katz, however, told Westlye the move would likely require a ballot vote and that it was too late to start the process before the GGRA’s petition would be filed in June.

Asecond compromise offer from Katz included a freeze on the amount employers must pay toward health care under the plan. Currently, employers with 20 to 99 employees must pay $1.23 per hour toward health care, and employers with 100 or more pay $1.85 toward the plan. Those rates increase annually and are scheduled to go up to $1.30 per hour and $1.96 per hour, respectively, on Jan. 1, according to the San Francisco Chronicle.

Katz offered to freeze the current-year rates for one year, if the GGRA would drop its lawsuit.

Westlye, however, on Wednesday declined the offer, saying restaurant operators needed a more permanent source of economic relief.

Enacted in January 2008, the employer mandate included in the health plan has placed a difficult burden on restaurant operators who are struggling to survive during the current recession, Westlye said.

Several longtime operators in the city have either closed or announced plans to close their restaurants in recent weeks, he said, pointing to the Washington Street Bar & Grill, Rubicon, Frisee and Jack Falstaff — the latter a venue operated by the PlumpJack Group, which is owned in part by San Francisco Mayor Gavin Newsom.

“I think you’re seeing very good operators closing restaurants because they can’t pay their bills, and there are a lot more that are just hanging on,” said Westlye.

He noted that the GGRA was still willing to pursue a compromise on the universal health care dispute.

“I’m not saying we’ll drop the lawsuit if they freeze the rate permanently, but we’re open to discussion,” he said.

Contact Lisa Jennings at [email protected].