Summary
The San Francisco Health Care Security Ordinance (HCSO) requires Covered Employers to satisfy an employer spending requirement by making health care expenditures for their Covered Employees, among other reporting and notice requirements. The San Francisco Office of Labor Standards Enforcement (OLSE) is responsible for enforcing the employer requirements of the HCSO. The OLSE recently released updated 2019 HCSO rates. For complete information about the HCSO, please visit the HCSO Website.
Updated Rate Information
The updated HCSO Rates are as follows:
| Employer Size | Number of Employees | 2018 Expenditure Rate | 2019 Expenditure Rate |
| Large | All employers w/100+ employees | $2.83 per hour payable (max $486.76 per month for a full time employee) | $2.93 per hour payable (max $503.96 per month for a full time employee) |
| Medium | Businesses w/20-99 employees Nonprofits w/50-99 employees |
$1.89 per hour payable (max $325.08 per month for a full time employee) | $1.95 per hour payable (max $335.40 per month for a full time employee) |
| Small | Businesses w/0-19 employees Nonprofits w/0-49 employees |
Exempt | Exempt |
Background
Who is a Covered Employer?
Employers are subject to the HCSO if they employ one or more workers within the geographic boundaries of the City and County of San Francisco, if they are a for-profit business with 20 or more employees worldwide or a nonprofit with 50 or more employees worldwide, and if they are required to obtain a San Francisco Business Registration Certificate.
Who is a Covered Employee?
An employee is covered by the HCSO if they work for a Covered Employer and they:
- are entitled to be paid the minimum wage;
- have been employed by their employer for at least 90 calendar days;
- perform at least 8 hours of work per week within the geographic boundaries of San Francisco; and
- do not meet one of the 5 exemption criteria.
Exemption Criteria (who does NOT need to be considered for HCSO purposes)
- Employees who voluntary waive their right to have their employers make health care expenditures on their behalf because they have other employer coverage;
- Employees who qualify as managers, supervisors and they earn more than the salary exemption amount;
- Employees who are covered by Medicare or TRICARE;
- Employees who are employed by a non-profit corporation for up to one year as trainees in a bona fide training program consistent with federal law; or
- Employees who receive health care benefits pursuant to the San Francisco Health Care Accountability Ordinance (HCAO).
Notice Requirement
Every Covered Employer must post an HCSO Notice in a conspicuous place at any workplace or job site where any Covered Employee works. Every Covered Employer is required to post the Official Notice in English, Spanish, and Chinese. The front of the Official OLSE Notice already includes these three languages.
Every Covered Employer must also post the Official Notice in any other language spoken by at least 5% of the employees at the workplace. The back of the Official OLSE Notice includes translations into Tagalog, Russian, and Vietnamese. If more than 5% of the workers at the workplace speak any other language, the employer is responsible for translating and posting notice in that language.
Record-keeping Requirement
Covered employers must keep pertinent HCSO records and documentation (itemized pay statements, employee information, records to support the employer has met the expenditure requirement, proof that expenditures were made, employee terminations, employee voluntary waiver forms, copies of notices given to employees, etc.) for a period of four years.
Reporting Requirement
Covered Employers shall provide information to the City regarding their Health Care Expenditures on an annual basis (by April 30th). The Employer Annual Reporting Form will be posted on the OLSE website annually around April 1st.
To receive an email notification each year when the Annual Reporting Form is available, please sign up for the HCSO Email List.
Additional Resources
The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.
