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Restaurants face 7.5% payroll tax under new Calif. healthcare plan

SACRAMENTO Calif. Democratic lawmakers have proposed a healthcare-reform plan that would require restaurants and other employers to spend the equivalent of at least 7.5 percent of their payrolls on healthcare.

The plan under discussion would almost double the burden proposed for employers under an earlier proposal aired by Gov. Arnold Schwarzenegger. The Republican governor's measure would have levied a 4 percent payroll tax on employers who don't offer health insurance to employees. Doctors, hospitals, insurers, state and local governments and individuals would also share the costs of insuring all state residents under Schwarzenegger's plan.

The Democrat-backed plan would require businesses to spend a set 7.5 percent of their payroll on healthcare coverage for employees, either by paying for insurance or contributing to a state fund that would insure workers. A Senate version of the plan would exempt the self-employed. A version before the state Assembly would exempt businesses less than three years old and those with an annual payroll under $100,000.

The California Restaurant Association is expected to oppose the more burdensome employer mandate, though association president Jot Condie has not taken a firm position on the governor's plan because details have yet to be revealed.

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