1. Is an employer required to make minimum Health Care Expenditures for all of its employees?
Covered Employers are only required to make Health Care Expenditures to or on behalf of their “Covered Employees.”
Updated January 6, 2016
2. Which employees are “Covered Employees”?
An employee is covered by the HCSO if s/he works for a Covered Employer and:
- is entitled to be paid the minimum wage,
- has been employed by his or her employer for at least 90 calendar days,
- performs at least 8 hours of work per week within the geographic boundaries of San Francisco, and
- does not meet one of the five exemption criteria discussed below.
Updated January 6, 2016
3. What if the number of hours that an employee works in San Francisco changes over the quarter?
An employee who regularly works eight or more hours per week in San Francisco is covered by the HCSO. For example, an employee who regularly works one eight-hour day per week for the month of January is a covered employee for that month, even if she does not work during the last two months of the quarter.
For employees whose work hours in San Francisco fluctuate below eight hours per week, Covered Employers are only required to make Health Care Expenditures during those quarters in which the employee works an average of eight or more hours per week in San Francisco. For example, an employee who works an irregular schedule ranging from 5 to 11 hours per week during the quarter may be covered if the average of hours worked per week is 8 or more.
For an employee who is terminated before the end of the quarter, calculate the average by dividing the total number of hours worked during that quarter by the number of weeks employed during that quarter.
Note that “hours worked” is relevant to determining whether an employee is covered by the HCSO, but “hours paid” is the figure used to calculate the minimum expenditure for each Covered Employee, as described in Section E.
4. Can an employer provide health benefits to an employee before that individual has been employed for 90 days?
Yes. Nothing in the HCSO prevents an employer from providing health care benefits or spending money on Health Care Services before the employee becomes a “Covered Employee” under the San Francisco law.
5. If an employee leaves the job and is re-hired at a later date, does the employee have to wait 90 days to be covered by the HCSO?
It depends. If the employee is rehired within one year of the last day of previous employment, s/he is not required to complete a new 90-day eligibility period. In addition, the eligibility period need not be continuous – if the employee had only completed part of the 90-day eligibility period before leaving, the prior days of employment count towards the eligibility period when s/he returns.
If the employee is rehired more than one year after the last day of her previous employment, the employer may require him/her to complete a new 90-day eligibility period before s/he is covered by the HCSO.
Updated January 6, 2016
6. Are owners considered Covered Employees under the HCSO?
Although owners who perform work for compensation must be counted for the purpose of determining employer size, owners are not considered Covered Employees because they are not entitled to payment of the minimum wage. Thus, the business is not required to make Health Care Expenditures to or on behalf of the owner(s).
7. Does the HCSO cover undocumented employees?
Yes. All employees who work in San Francisco who meet the definition of a Covered Employee – whether or not they are legally authorized to work in the United States – are covered by the law. The OLSE will process an employee’s claim without regard to his or her immigration status; employees filing a claim with the OLSE will not be questioned about their immigration status.
8. Does the HCSO require employers to make Health Care Expenditures for legitimate independent contractors?
No. Employers are only obligated to make Health Care Expenditures on behalf of employees. However, merely labeling someone an “independent contractor”, or issuing a 1099 form, does not make him or her so. A fact-specific inquiry determines whether a person is an employee or an independent contractor. When making this determination, the OLSE relies on state law and on the factors outlined in Dynamex Operations W., Inc. v. Superior Court, 4 Cal. 5th 903 (2018), reh’g denied (June 20, 2018).
Updated September 18, 2018
9. Are any employees exempted or excluded from eligibility under the HCSO?
Yes, there are five categories of exempt employees:
- Employees who voluntarily waive their right to have their employers make Health Care Expenditures for their benefit.
- Employees who qualify as managers, supervisors, or confidential employees AND earn more than the applicable salary exemption amount.
- Employees who are eligible for Medicare or TRICARE (the health care program serving Uniformed Service members, retirees and their families). In order to claim these exemptions, an employer must be able to document employee eligibility.
- 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.
- Employees who receive health care benefits pursuant to the San Francisco Health Care Accountability Ordinance (HCAO).
Updated May 17, 2019
10. How does an employee voluntarily waive the right to Health Care Expenditures?
If an employee is receiving health care benefits through another employer, s/he is permitted to sign the OLSE Employee Voluntary Waiver Form (PDFs available in English Chinese Spanish Filipino). The Waiver verifies that the employee is receiving health care benefits through another employer (such as a spouse’s, domestic partner’s or parent’s employer, or this employee’s second job) and that s/he knowingly and voluntarily waives the right to have his/her current employer make Health Care Expenditures on his/her behalf.
Coverage purchased by the employee for him or herself or that the employee is receiving through Medi-Cal or a county health program, is not “benefits received through another employer.” A waiver form that states the employee only has such coverage is not a valid waiver.
Employers must use the OLSE Employee Voluntary Waiver Form, which OLSE developed to ensure that the employee understands his/her rights under the HCSO, so that the waiver is a knowing and voluntary one. Employers may not alter the form in any manner. Other forms provided by third-party vendors or health insurance carriers cannot be used in lieu of the City’s Employee Voluntary Waiver form.
Updated January 6, 2016
11. What makes an Employee Voluntary Waiver Form valid?
For an Employee Voluntary Waiver Form to be valid, the employee must fully understand his/her rights under the HCSO, and the Voluntary Waiver must be voluntarily completed by the employee without pressure or coercion from coworkers, the employer, or anyone connected to the employer.
If the employee fails to state on the form that he/she is receiving benefits through another employer, or leaves that section of the waiver form blank, the waiver for is not valid.
An employee voluntary waiver is effective on the date it is signed and is valid for one year or until revoked by the employee. Employees who wish to waive their rights for more than one year must sign a new waiver each year when the prior form expires. Employees cannot waive their rights retroactively.
Employees have the right to revoke their voluntary waiver at any time; the revocation must be submitted in writing. Employers must maintain documentation of waivers and revocations and provide employees with complete copies of such documentation.
An electronic signature is acceptable on the HCSO Employee Voluntary Waiver Form if all of the following conditions are met:
- The form is an exact replica of the OLSE’s official Employee Voluntary Waiver Form;
- The employee can view the entirety of the form at the same time as they sign it (i.e., the signature is not on a separate page from the form itself);
- No language on the website suggests the employee is required to sign the form.
- The employer retains a copy of the signed form for its records and also gives the employee a printed copy of the entire signed form.
Updated January 6, 2016
12. Who qualifies as a Manager, Supervisor, or Confidential Employee?
These terms are defined as follows:
- Managerial employee: an employee who has authority to formulate, determine, or effectuate employer policies by expressing and making operative the decisions of the employer and who has discretion in the performance of his/her job independent of the employer's established policies.
-
Supervisory employee: an employee who has authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or the responsibility to direct them, or to adjust their grievances, or effectively to recommend any such action, if the exercise of this authority or responsibility is not of a merely routine or clerical nature, but requires the use of independent judgment.
-
Confidential employee: an employee who acts in a confidential capacity to formulate, determine, and effectuate management policies with regard to labor relations, or regularly substitutes for employees having such duties.
13. What is the earnings requirement that goes along with the Managerial, Supervisorial, Confidential Employee exemption?
If an employee is a Managerial, Supervisorial, or Confidential Employee and also earns the following annual or hourly rate or a higher rate for the applicable year, that employee is exempt from the HCSO:
2024
Annual Salary: $121,372
Hourly Salary: $58.35
2023
Annual Salary: $114,141
Hourly Salary: $54.88
2022
Annual Salary: $109,643
Hourly Salary: $52.71
2021
Annual Salary: $107,991
Hourly Salary: $51.92
The earnings figure represents "the regular rate of pay" as the term is defined and used by the California Labor Commissioner. In that context, the regular rate of pay includes commissions and piece rate wages, but does not include overtime wages, gifts, or most bonuses. Thus, an employee who is a manager and earns an annual base salary that is at or above this figure will be considered exempt from the HCSO even if she is not employed for the full year. Employees who are compensated on an hourly basis and fall into the managerial, supervisory, or confidential employee categories are also exempt from the HCSO if they earn more than the applicable hourly wage listed above.
Updated January 5, 2024
14. What is the nonprofit employee exemption?
To be exempt trainees of a nonprofit for up to one year, employees must meet three criteria:
1) The trainee is participating in a bona fide training program consistent with Federal Law as defined in the Code of Federal Regulations, Title 29, Part 520:
Bona fide vocational training program means a program authorized and approved by a state board of vocational education or other recognized educational body that provides for part-time employment training which may be scheduled for a part of the work day or workweek, for alternating weeks or for other limited periods during the year, supplemented by and integrated with a definitely organized plan of instruction designed to teach technical knowledge and related industrial information given as a regular part of the student-learner's course by an accredited school, college, or university.
2) That training program enables the trainee to advance into a permanent position.
3) The trainee does not replace, displace, or lower the wages or benefits of any existing position or employee.