Classic San Francisco Restaurant Pays Out $226K Due to Health Care Mandate Violations

Mission District mainstay Foreign Cinema paid out $226,217.48 in restitution to both current and former employees after the city of San Francisco found the restaurant “failed to satisfy the health care expenditure requirements,” SFGATE reports.

According to records reviewed by the outlet, The alleged violations occurred between April 1, 2020, and March 31, 2023, and the restaurant sent restitution payments to 146 employees starting in November 2023. The restaurant then settled with the Office of Labor Standards Enforcement in December 2023. The company paid $10,122.82 in penalties, which was reduced from $40,000 after the restaurant’s owners began sending checks to employees quickly and did not require a payment plan, a compliance officer with the agency said.

The Foreign Cinema ownership disagrees with the claims made by the city, but co-owner John Clark told SFGATE they couldn’t afford litigation. “We are not guilty of any wrongdoing, and we are not guilty of any sort of malicious behavior,” Clark said, stating that the prompt payment to employees is “evidence” of the restaurant's commitment to the city’s health care mandate. Foreign Cinema, along with all San Francisco employers, must spend a minimum amount on health care for employees who work over eight hours a week, with the amount paid determined by the number of workers employed at the business.

To cover employee healthcare, Foreign Cinema charges diners a six percent fee, and the restaurant contributes to the SF City Option — which provides reimbursement to employees for health insurance and health-related expenses — while also offering employees insurance through the business, Clark says. The situation was further complicated by the number of employees who went with the restaurant’s insurance plan versus those who chose the city program, he told SFGATE, and led to the differences in payments to the city. Ultimately, however, the amounts paid to the SF City Option fund weren’t enough, as the restaurant was still required to pay per-hour contributions for every employee.

It’s not the only San Francisco restaurant to run afoul of guidelines around fee distribution; following the closure of NoPa restaurant Automat, employees alleged that its 20 percent service fee was complicated to distribute, creating uneven fee payouts between the front and back of house teams.