The San Francisco Health Care Security Ordinance (HCSO) requires that employers submit the employer Annual Report Form by May 3, 2024. The report must be submitted to the Office of Labor Standards Enforcement (OLSE), the organization with oversight over the HCSO ordinance.
The purpose of the Annual Report Form is to provide OLSE with a snapshot of each employer’s compliance with this ordinance. The penalty for failing to submit the form by the deadline is $500 per quarter.
Reporting Details
The reporting requirement includes basic business data as well as data to clarify Covered Employer status. In addition, the following data points are requested:
- Number of individuals employed in each quarter of 2023
- Number of employees covered by HCSO in each quarter
- Employer’s total spending on healthcare
- Types of healthcare coverage the employer offered to employees.
The Annual Report Form (ARF) must be completed online. OLSE provides robust assistance material online, including instructions for completing the ARF, form previews, and a video guide to completing the ARF: ARF Instructions.
The deadline for filing the 2023 form is May 3, 2024.
HCSO Primer
For those that might want a Refresher!
Covered Employers
An employer need not be physically located in San Francisco to be a covered employer. HCSO applies to the following employers:
-
Private Employers: Private employers who employ 20+ employees where any single employee works at least 8 hours per week in San Francisco
-
Non-Profit Employers: Non-profit employers who employ 50+ employees where any single employee works at least 8 hours in San Francisco.
Employer size counts are based on the average number of employees per week who perform work for compensation during an applicable quarter (not just those employees working in San Francisco).
Covered Employees
A covered employee is any person who meets the following four criteria:
-
Works for a covered employer
-
Is entitled to be paid minimum wage
-
Has been employed by the employer for at least 90 days
-
Performs at least eight hours of work per week in San Francisco.
The definition of employee under the ordinance includes all employees, even if they are temporary, part-time, commissioned or contracted.
Work performed by an employee who lives in San Francisco and works from home is considered work performed within San Francisco.
Employees who travel through San Francisco while carrying out their job duties are not considered to have performed work in San Francisco; however, if an employee's job requires him or her to make stops in San Francisco (e.g., deliveries), the employee is considered to have performed work in San Francisco. For these employees, hours worked include travel within the geographic boundaries of San Francisco.
Employee Waivers
Employers may ask employees who have other employer-provided coverage to waive the expenditure. However, such employees are not required to waive the expenditure (and in many circumstances, it does not behoove them to do so).
If an employee elects to waive, they must do so using the authorized HCSO voluntary waiver form. The waiver form must be signed each year, cannot be retroactive, and is revocable at any time.
If an employee with other coverage does not sign the voluntary waiver, the employer must still make the required health care expenditure on their behalf and may be liable for noncompliance penalties if expenditures are not made.
Expenditure Requirements
The ordinance requires covered employers to spend a minimum amount set by law on healthcare for each employee who works 8+ hours each week in San Francisco. Following are the required expenditure rates:
|
2023 Expenditure Rates
|
Expenditure Rate
|
Monthly Maximum*
|
|
100+ Employees
|
$3.40 per hour
|
$584.80
|
|
20 to 99 Employees (For Profit)
50-99 Employees (Nonprofit)
|
$2.27 per hour
|
$390.44
|
|
0 to 19 Employees (For Profit)
0-49 Employees (Nonprofit)
|
Exempt
|
N/A
|
* Total hours for which a healthcare expenditure is required are capped at 172 per employee per month.
There is an exemption for certain managerial, supervisory, and confidential employees who earn more than $114,141 per year (or $54.88 per hour) in 2023. These employees are exempt and the HCSO expenditure requirements do not apply to them.
Resources
Administrative Guidance for SF HCSO
San Francisco Business Registration Certificate
HCSO Voluntary Waiver Form
2024 HCSO Poster
SF City Option Program
HCSO Annual Report Form Resource Guide
HCSO Self-Funded Premium Calculations
