The San Francisco Health Care Security Ordinance is a law that requires employers to offer health care coverage for all employees.

It also requires businesses with more than 20 employees to pay an annual fee per employee. After which, the city government will provide free medical services for residents living below the poverty line.

This ordinance was created in 2006 and has been amended many times since then. As you can see, it’s not easy trying to figure out what this law entails! In this article, we will attempt to make this a little bit hectic for you.

So whenever you’re ready to learn more about the intricacies of the ordinance, keep reading.

San Francisco Health Care Security Ordinance: The Basics

The San Francisco Health Care Security Ordinance is a law that has been in effect since 2006.

It requires all employers to provide paid sick leave. This includes time off for employees who are ill or want to care for an ill family member, including their children and parents.

The amount of days each year depends on the size of your business. It’s more generous than California state laws (which do not require any benefits).

If you employ at least 20 people within the city limits, you must offer up to 72 hours per year. However, if you have fewer than 20 workers but work in one of its surrounding counties:

  • Alameda County
  • Contra Costa County
  • Marin County
  • Napa County
  • Solano Country

You need to offer 40 hours of sick leave per year. That is the ordinance.

Why Is It Important to Care About the San Francisco Health Care Security Ordinance?

The first reason is that it’s a law. The city will punish those who do not follow this ordinance by charging them with a misdemeanor. And they can even be fined up to $1000 each day they remain in violation of the code.

If you continue allowing your employees to work without sick days, then there is a chance you could suffer some serious consequences.

Further, San Franciscans take pride in their healthy lifestyles. Many people bike here all year round or walk through one of its famous hilly neighborhoods daily.

Those same locals may want to spend time away from these active areas during cold and flu season. Thus, offering paid leave encourages workers to take the time they need to get better.

It also gives employees a way to care for sick children or other family members without worrying about losing their jobs.

2021 Employer Health Care Expenditure

Employers in San Francisco may want to budget for additional sick leave expenses. According to the Healthy SF plan, they’ll need to raise $91.66 million annually by 2021.

These funds will pay city employees and their families who rely on Medi-Cal (California’s Medicaid program). This comes from a new tax meant to offset health care costs, so it won’t be something you have to worry about as an employer.

It should feel like putting money into your savings account because you know you’ll get some of it back later down the line. The best part? Your workers can finally take time off without having any anxiety over how much they’re losing in earnings while away from work.

According to the United Health Foundation 2020 report, San Francisco ranks second in health care expenditures. It spends an average of $16,0911 per capita each year on medical costs.

As a result, companies who do not offer paid sick days could risk losing valuable employees—or having them leave their positions solely because they cannot take time off when they are ill or need to tend to other family members’ needs.

If you want your company (and its bottom line) to succeed, then you should follow this new law and give workers what they deserve if/when needed.

If you would like more information about how SFHCSO affects businesses within the city limits of San Francisco, contact an employment lawyer today. Check out this link as well for useful content and services:

Who Is a Covered Employer?

Under this law, a covered employer has at least one employee (regardless of their full-time or part-time status) and/or a temporary agency worker on its payroll.

If you have any questions about your business’s specific setup, it is best to contact the Department of Human Resources.

Yes—there are exceptions for some businesses that do not work within San Francisco city limits. Specifically, those whose employees work outside city boundaries more than 50 percent of the time during a typical three-month period.

For example, if an independent sales rep lives in Richmond but spends most of his working hours selling products throughout SF, he would still be covered by this ordinance despite being based in another county.

However, it is important to note that employees who travel outside of the city “temporarily” are not considered covered by SFHCSO.

Who Is a Covered Employee?

Generally, a covered employee is any person who works for an employer that has over $500K in gross receipts annually and meets specific conditions.

The employee must be paid minimum wage or more than $10/hr., have been employed by the company for at least 90 days but not exceed 2 years of employment with less than 1-year break between jobs, perform at least 8 hours per week within San Francisco city limits to qualify as employees under this law.

Furthermore, employees who work in San Francisco but are not considered “covered” under this law include independent contractors, outside salespeople, and participants in a federally subsidized work-study program.

There are 5 exemptions to the covered employee’s definition:

  • Employees whose work is done entirely outside of SF
  • Seasonal or temporary workers who are paid an hourly rate less than the minimum wage
  • Workers under 16 years old (though they may be able to find child care there)
  • Those employed by parents, spouse, children, and/or grandparents (however, if another relative owns the business, then this does not apply)
  • Employees who have been placed in transitional jobs through local social service organizations are exempt from SFHCSO

Another exemption is for nonimmigrant visa holders.

These include foreign government officials on assignment here and their immediate family members, including people on official business such as trade representatives, students, and tourists.

Steps for Covered Employers

If you are an employer within the city limits of San Francisco, then it’s time to start planning for this new ordinance. The steps below will help guide you through complying with SFHCSO:

Number & Organize

Number each page of your employee handbook and keep them in a binder to be easily referenced if needed.

You should also update all internal documents related to employment—including job descriptions, offer letters/agreements, performance evaluations, and disciplinary actions—to include information about paid sick leave allowances.

Systemize the Process

Create a system for submitting requests or using available hours.

Ensure employees understand how much they can use during any given year (up to 72 hours per year) when they need approval from their manager before taking off and how they can submit a request to take time off.

A business without a systemic approach is not really a business. It’s more of a hobby and a passion, and there’s nothing wrong with that. However, if you’re looking to make money, you have to think differently.

Train & Educate

Train managers on the new law so that everyone is up to speed with what needs to be done for SFHCSO compliance.

One great way of doing this is by holding mandatory training in advance. Even if you already have, it’s never too late to change or update materials as needed.

The city has provided resources within its FAQ section that offer step-by-step instructions (including examples) on how businesses should implement these changes. Have your employees read through them all before attending training sessions because open dialogue will make any future conversations easier down the line.

Update & Ensure

Review and update your company’s paid time off policies. If you already have a sick leave policy in place, it should obviously be compliant with the new ordinance.

But if not, now is the time to create one that will help ensure employees can take care of their health or loved ones without any fear of financial loss. These policies not only protect you from ordinance issues but also improve your employee’s quality of life.

Observe & Act

Ensure that managers are not taking advantage of their employees by tracking or policing sick days.

The ordinance states that a manager can only ask an employee about the reason for their time off if they have already used up all available paid leave (i.e., there are no more vacations, PTO, or personal day hours).

If they need to take additional time during work hours, it must be approved in advance and cannot exceed three consecutive workdays without pay.

Document & Track

Ensure you have documented proof of how much paid sick leave your employees use each year so that annual reports do not come as a surprise down the line.

Keep track of this information using spreadsheets or other digital tools—and don’t forget to update it as needed. Documentation is of utmost importance when it comes to proving something later down the road.

Remember to Provide Proof

Provide proof of SFHCSO compliance to the Office of Labor Standards Enforcement (OLSE) annually by December 15th.

This can be done online and will require information about your business and how many employees you have on staff each year. Without this, you are subjecting your business to serious consequences under the ordinance.

Keeping of Records

Covered employers are required to keep certain records for a period of four years after an employee’s first day at work.

These include itemized pay statements, proof the employer is complying with spending requirements. It also covers signed waivers from every covered worker in which they accept exemption from said requirement.

Every time someone new starts working, there must be updated copies sent out. There must be notification to employees about payment options if not paid enough. This occurs according to the law within thirty days of the employment start date.

Employers are prohibited from retaliating against employees who exercise their rights. If an employer takes any adverse action within 90 days of exercising its right, it is assumed to be retaliation. This is for that act unless proven otherwise by evidence other than timing alone.

The HCSO notice is updated every year and posted at any workplace where a covered employee works. It’s available from the Office of Labor Standards Enforcement (OLSE) in multiple languages to all employees. This includes those who speak English as their second language or does not understand it well enough.

Schools with 20 or more students are also required by law to provide this information for people working on campus. For instance, janitors and food service staff members.

SFHCSO Elaborated

By taking these steps, you can ensure that your business complies with the San Francisco Health Care Security Ordinance and employees are treated fairly. There’s a lot to take care of here—so it’s important not to wait too long before starting!

Make sure you have updated all necessary information about this new ordinance so that things run smoothly from now on. Everyone wins when there is clear communication between employers and workers.

If you’re interested in learning more about similar important topics, feel free to check out some of the other articles on the sidebar.