Employers covered by the San Francisco Health Care Security Ordinance ("SFHCSO") must submit their Annual Reporting Form to the San Francisco Office of Labor Standards Enforcement ("OLSE") on or before May 1, 2023. Covered Employers should also be aware that effective January 1, 2023, OLSE released a new poster to be posted in all workplaces with Covered Employees (and to be distributed to remote Covered Employees), as well as issued new 2023 required Health Care Expenditure rates.
Under the SFHCSO, Covered Employers must make certain minimum Health Care Expenditures on a quarterly basis for their Covered Employees. Covered Employers must:
- Calculate and make the required Health Care Expenditures on behalf of their Covered Employees based on the following hourly rates:
2023 Health Care Expenditure Rate per Covered Employee
2022 Health Care Expenditure Rate per Covered Employee
Small Employer (For-profit: 0-19 workers; Nonprofit: 0-49 workers)
Medium Employer (For-profit: 20-99 workers; Nonprofit: 50-99 workers)
$2.27 per hour ($390.44 per month maximum)
$2.20 per hour ($378.40 per month maximum)
Larger Employer (For-profit: 100 or more workers; Nonprofit: 100 or more workers)
$3.40 per hour ($584.80 per month maximum)
$3.30 per hour ($567.60 per month maximum)
- Maintain records of their Health Care Expenditures;
- Post the SFHSCO poster in all workplaces with Covered Employees and distribute a copy to remote Covered Employees (new poster for 2023); and
- Submit the SFHSCO Annual Reporting Form to OLSE by May 1, 2023 (Note: Due date is generally April 30 of the year following the year to which the reporting form relates, but since that date falls on a Sunday in 2023, the due date has been changed for this year).
Does the Ordinance Apply to You?
As a reminder, the SFHCSO applies to:
- Covered Employers who:
- Employ one or more Covered Employees in the City or County of San Francisco;
- Are required to maintain a valid San Francisco business registration certificate under Article 12 of the Business and Tax Regulations Code; and
- Are for-profit medium (20-99 workers) to large (100 or more workers) employers or are nonprofit employers with 50 or more workers. The number of "workers" includes all persons working for the entity, regardless of whether the workers are located in San Francisco or outside of the City.
- Covered Employees who:
- Work for a Covered Employer within the City or County of San Francisco for at least 8 hours per week on average during the calendar quarter;
- Are entitled to be paid the minimum wage;
- Have worked for the Covered Employer for at least 90 calendar days; and
- Do not fall into any of the following categories of exempt employees:
- Employees who waive their right to have their Covered Employer make the Health Care Expenditures on their behalf;
- Employees who qualify as managers, supervisors, or confidential employees AND earn more than the salary exemption amount (2023: $114,141 annual salary/$54.88 hourly salary);
- Employees who are eligible for Medicare or TRICARE;
- Employees who are employed by a nonprofit corporation for up to 1 year as trainees in a bona fide training program; and/or
- Employees who receive healthcare under the San Francisco Health Care Accountability Ordinance.
What Are Health Care Expenditures?
Health Care Expenditures are generally defined as:
- Any amount paid by a Covered Employer to its Covered Employees, or to a third party on behalf of its Covered Employees, for the purpose of providing or reimbursing the cost of healthcare services for Covered Employees and/or their spouses, domestic partners, children, or other dependents; and
- An amount paid by a Covered Employer to the City of San Francisco on behalf of a Covered Employee to establish his or her eligibility to participate in the City's Health Access Program.