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Hornblower ferry company pays $2.75M for violating SF healthcare laws

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(Evan DuCharme/Special to the S.F. Examiner)

An investigation into a labor complaint against a ferry company operating on the San Francisco Bay has resulted in a $2.75 million settlement, City Attorney Dennis Herrera announced Tuesday.

Hornblower Yachts and its affiliate Alcatraz Cruises, who are also tenants of the Port of San Francisco, have paid $2.75 million in a settlement agreement with The City for failing to provide employees with adequate health insurance under San Francisco’s health care laws.

The complaint was investigated by the Office of Labor Standards Enforcement and the City Attorney’s Office settled the matter without filing a lawsuit.

The ferry company has paid the $2.75 million settlement, of which $926,167 will go directly to 421 employees. San Francisco General Hospital will receive $1.3 million to cover health care costs incurred due to the company failing to provide required health care benefits and $500,000 in penalties will be paid to The City.

The violations occurred between 2011 and 2015 when the companies failed to comply with provisions of the Health Care Security Ordinance and the Health Care Accountability Ordinance. The laws require an employer and a city contractor or tenant to provide health benefits to employees, such as by spending a certain amount on each employee.

“San Francisco is committed to ensuring that workers have real health care,” Herrera said in a statement. “What Hornblower and Alcatraz Cruises did cheated not only their employees, but also San Francisco taxpayers and the honest competitors in the marketplace. Let this send a clear message to employers looking to skirt the law: Don’t. We take these matters very seriously.”

The City said Hornblower and Alcatraz Cruises violated the health benefit laws by creating complicated eligibility requirements to deny health benefits, such as by not giving medical benefits to employees they labeled “seasonal.”

Some workers were not offered medical insurance for years, and when they were, the health plans fell short of the minimum standards required under the laws.

Some workers reported they were chronically ill, unable to afford doctor visits and medicine without medical coverage.

“San Francisco is serious about enforcing labor laws, especially along the working waterfront,” said Pat Mulligan, Director of the Office of Labor Standards Enforcement. “It is vital that employees have access to health care and that City lessees meet the requirements of local law.”

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