The work function is still positive, but the value of the y-intercept is equal to negative work function. Think about what the graph is showing, and remember that the y-axis represents the maximum kinetic energy of the photoelectrons - in order for an electron to be emitted, with 0 or more kinetic energy afterwards, energy needs to be transferred to it. So when an electron is still bound in the surface of the metal, you can say it has 'negative kinetic energy' (although, as you've correctly mentioned, that's not quite the case - but it works as a graphical model of the kinetic energy here).