San Francisco requires covered employers to make minimum healthcare expenditures on behalf of their San Francisco employees and to comply with certain requirements regarding the use of arrest and conviction records in hiring and other employment decisions. Covered employers must report each year on compliance with both of these requirements. The next report for 2023 is due by May 3.
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Background
Since 2006, the San Francisco Health Care Security Ordinance (HCSO) has required covered employers to make minimum healthcare expenditures on behalf of employees working in San Francisco. “Covered employers” are those with 20 or more employees in the U.S. and with at least one employee working in San Francisco, including any employee working from home. Another city ordinance — the Fair Chance Ordinance (FCO) — requires employers with five or more employees worldwide to comply with certain requirements “regarding the use of arrest and convictions records in hiring and employment decisions.”
Covered employers must report to San Francisco’s Office of Labor Standards Enforcement (OLSE) by April 30 each year on compliance with both the HCSO and FCO requirements. Employers that fail to make a timely submission are subject to penalties.
Annual reporting for 2023 required by May 3
The 2023 Annual Reporting Form and instructions are now available on the San Francisco HCSO website. The deadline for submission of the form is May 3. Failure to meet the deadline could subject the employer to a penalty of $500 per quarter. The online form will not be available after May 3.
2024 minimum expenditure rates
During 2024, covered employers are required to make healthcare expenditures no later than 30 days after the end of each calendar quarter on behalf of covered employees (those who have been employed for more than 90 days and regularly work at least eight hours per week in San Francisco) at the following rates:
| Business size | January 1, 2023 | January 1, 2024 | Percentage change | |
| Large | All employers w/100+ employees | $3.40 per hour paid | $3.51 per hour paid | 3.23% increase |
| Medium | Businesses w/20 – 99 employees Nonprofits w/50 – 99 employees |
$2.27 per hour paid | $2.34 per hour paid | 3.08% increase |
| Small | Businesses w/0 – 19 employees Nonprofits w/0 – 49 employees |
Exempt | Exempt | Not applicable |
Note: 2024 exemption threshold: Managerial, supervisory, and confidential employees who earn more than $121,372 annually (or $58.35 per hour) are exempt from the HCSO minimum expenditure requirement.
Covered employers should ensure that they maintain records sufficient to establish compliance with the spending requirements and have posted the 2024 HCSO poster in their workplaces or job sites.
In closing
San Francisco’s annual reporting for HCSO and FCO compliance for 2023 is due by May 3. Covered employers should also ensure that they are making the minimum healthcare expenditures and satisfy all other requirements under those ordinances during 2024.
2024 Reporting and disclosure (R&D) guide
Now available to help you meet your employee benefit R&D obligations, download the latest edition of Buck’s Reporting and disclosure guide: Retirement and welfare benefit plans.
Volume 47 | Issue 09