On July 2, 2021, San Francisco Mayor London Breed signed an amendment to the San Francisco Health Care Security Ordinance (SF HCSO), which expands the definition of covered employees to include those teleworking (even outside of SF) during a period in which a City health order places restrictions on onsite work and/or encourages employees to telework during the COVID-19 pandemic. The amendment takes effect on August 1, 2021.
At the time of this article, there is no such City health order in place, meaning employees working remotely outside of SF continue to not be covered by the HCSO. Nonetheless, covered employers should be acutely aware of any changes to the City’s health orders that would require them to provide HCSO health care expenditures on behalf of employees teleworking outside of SF.
Previous Definition of Covered Employees
SF HCSO requires covered employers to spend a minimum amount of irrevocable health care expenditures on behalf of their covered employees.
A covered employee was defined as an employee that works for a covered employer and:
- Is entitled to be paid minimum wage;
- Has been employed for at least 90 calendar days;
- Performs at least 8 hours of work per week within the geographic boundaries of SF; and
- Does not meet one of the five exemption criteria.
Prior to this amendment, HCSO did not clearly address telework. When determining whether an employee performed work within the geographic boundaries of SF, HCSO treated the location of telework as the location where the employee performed work. Therefore, covered employers were only required to provide health care expenditures for covered employees when they worked at a SF worksite or worked from home in SF. On the other hand, covered employers were not required to provide the health care expenditures for employees working from home outside of SF.
Telework Amendment Expanding the Definition of Covered Employee
This previous application of HCSO may have resulted in covered employers discontinuing HCSO health care expenditures for employees working remotely outside SF, while they continued to make such expenditures for employees working remotely within SF. The amendment notes that this application of the law could create inequities among employees and disincentivize employees from working remotely when a City health order was encouraging telework to reduce the spread of COVID-19.
To address the issue, the SF Board of Supervisors amended the definition of a covered employee under the HCSO. Under this new definition, during a period in which a health order places restrictions on onsite work in SF and/or encourages telework, a teleworking employee will be considered to be “working within the geographic boundaries of SF” if the employee was, is, or after the COVID-19 pandemic will be permitted or required to work from an office or worksite within SF.
In other words, covered employers will be required to make HCSO health care expenditures on behalf of an employee teleworking outside of SF if:
- They meet the other requirements of covered employee status (they are entitled to be paid minimum wage, have been employed for at least 90 calendar days, and do not fall within an exemption);
- They were, are, or after the COVID-19 pandemic will be permitted or required to work in SF; and
- A health order is in place restricting onsite work in SF and/or encouraging telework.
Practical Impact: According to an announcement on the SF HCSO website, the amendment does not currently have an impact because the City’s June 11th public health order removed the recommendation that employers “allow office employees to continue to work remotely as much as possible.” Since the expanded definition of a covered employee only applies for the period in which an applicable health order is in place, the expanded definition does not currently apply. Unless or until the City issues these health order restrictions, employees working remotely outside of San Francisco are not covered by the HCSO employer spending requirements.
Employer Action
Most covered employers were likely operating under the belief that they did not have to consider HCSO compliance for their employees working outside of SF. With this new amendment, covered employers should be aware that HCSO now covers employees teleworking outside of SF where a health order placing restrictions on onsite work and/or encouraging teleworking is in effect.
Though there is currently no such health order in place, covered employers should be aware of any changes to the City’s health orders, as these changes may trigger the requirement to provide HCSO expenditures for certain employees teleworking outside of SF. Alternatively, covered employers who want to avoid tracking the status of the City’s health orders may want to consider making the required HCSO expenditures for employees under the expanded definition of a covered employee, with or without an SF order in place (though this is not required under the amendment).
Additional Resources
