2020 HCSO Annual Reporting Delayed, Likely to be Waived
One year into the pandemic and not much has changed. The San Francisco Office of Labor Standards Enforcement (OLSE) has released a notice postponing the required Health Care Security Ordinance (HCSO) annual report for a minimum of six months, to at least October 31, 2021.
The San Francisco Board of Supervisors is currently considering proposed legislation that would waive the requirement to report on compliance with the San Francisco Health Care Security Ordinance (HCSO) for calendar year 2020 only. This is intended to “reduce the administrative burden on employers” to submit a report at a time of “significant economic strain and uncertainty.”
OLSE will be updating guidance when the status of the proposed legislation changes. If you recall, the 2019 HCSO annual report in April 2020 was also cancelled.
Bottom Line: Employers will not be completing the 2020 HCSO annual report in April, and they likely will not complete it at all. If the 2020 annual report is required (unlikely), it will not be due until at least the end of October.
- For more information on the HCSO generally, see our 2021 San Francisco Health Care Security Ordinance (HCSO) Guide.
Do Employers Still Have Obligations Under the HCSO?
Even though the requirement to report is delayed (and most likely will be canceled), under the HCSO, Covered Employers with 20 or more employees (50 or more employees for nonprofits) in any quarter are required to make a minimum level of health care expenditures for that quarter for employees:
- Who have been employed by the employer for at least 90 days,
- Who have performed at least 8 hours of work in San Francisco,
- And who do not meet any of the exemption criteria.
|Employer Size||2020 Rate||2021 Rate||172 Hours/month
100 + Employees
|$3.08/hour payable||$3.18/hour payable||$546.96/month
Business w/ 20-99
Nonprofit w/ 50-99
Employers are still required to make the 2021 quarterly expenditures, with the first quarter expenditures still due April 30, 2021.
What About Employees Working from Home?
With COVID-19, many employees are working from home. Employers are not required to make expenditures for any employees who work outside of the geographic boundaries of San Francisco. However, employers still are required to make health care expenditures for any remote employees who work from home in San Francisco.
- For full details, see: SF HCSO Compliance in the Work-From-Home Era.
Who is a HCSO Covered Employer?
You are a covered employer and are required to make health care expenditures if you met the following three conditions in the calendar quarter:
- employed one or more workers within the geographic boundaries of the City and County of San Francisco;
- were required to obtain a valid San Francisco business registration certificate pursuant to Article 12 of the Business and Tax Regulations Code, and
- employed 20 or more persons worldwide (for profit) or a nonprofit organization that employed 50 or more persons worldwide.
Which Employees are Exempt or Excluded from Eligibility under the HCSO?
There are five categories of exempt employees:
1. Employees who sign a waiver form and voluntarily waive their right to have employers make Health Care Expenditures for their benefit.
2. Employees who qualify as Managers, supervisors or confidential employees AND earn more than the applicable salary exemption amount.
3. Employees who are covered by Medicare or Tricare.
4. Employees who are employed by a non-profit corporation as a trainee in a bona fide training program.
5. Employees who receive health care benefits pursuant to the San Francisco Health Care Accountability Ordinance (HCAO)
A Reminder about the Waiver Form
The Employee Voluntary Waiver Form permits employees to voluntarily waive their right to employer health care expenditures under the HCSO. Employers must use the exact form and may not change the form in any way. Full details here.
For more information on all of the HSCO requirements, check out the SF OLSE’s official HSCO website.
– For more information, see our 2021 San Francisco Health Care Security Ordinance (HCSO) Guide.
Disclaimer: The intent of this analysis is to provide the recipient with general information regarding the status of, and/or potential concerns related to, the recipient’s current employee benefits issues. This analysis does not necessarily fully address the recipient’s specific issue, and it should not be construed as, nor is it intended to provide, legal advice. Furthermore, this message does not establish an attorney-client relationship. Questions regarding specific issues should be addressed to the person(s) who provide legal advice to the recipient regarding employee benefits issues (e.g., the recipient’s general counsel or an attorney hired by the recipient who specializes in employee benefits law).