1. Q: Is an employer required to make minimum Health Care Expenditures for all of its employees?
A: No. Covered Employers are only required to make Health Care Expenditures to or on behalf of their “covered employees.”
2. Q: Which employees are “Covered Employees”?
A: 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
3. Q: What if the number of hours that an employee works in San Francisco changes over the quarter?
A: 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. Q: 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?
A: 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, s/he does have to complete a new 90-day eligibility period before s/he is covered by the HCSO.
5. Q: Are owners considered Covered Employees under the HCSO?
A: 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).
6. Q: Does the HCSO cover undocumented employees?
A: Yes. All employees who work in San Francisco – 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.
7. Q: Does the HCSO require employers to make Health Care Expenditures for independent contractors?
A: No. Employers are only obligated to make health care expenditures on behalf of employees. However, merely labeling someone an “independent contractor” does not make him or her so. Consistent with California law, it is a fact-specific inquiry to determine whether a person is an employee or an independent contractor.
8. Q: Are any employees exempted or excluded from eligibility under the HCSO?
A: 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 are covered by Medicare
(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.
9. Q: How does an employee voluntarily waive the right to health care expenditures?
A: If an employee is receiving health insurance through another employer, s/he is permitted to sign an Employee Voluntary Waiver Form (available in English, Chinese, and Spanish). The Waiver verifies that the employee is receiving health care through another employer (such as a spouse’s, domestic partner’s or parent’s employer) and that s/he knowingly and voluntarily waives the right to have his/her current employer make a Health Care Expenditures for his/her benefit.
The Employee Voluntary Waiver form developed by the OLSE is intended to ensure that the employee understands his/her rights under the HCSO, so that the waiver is a knowing and voluntary one. Other forms provided by third-party vendors and health insurance carriers cannot be used in lieu of the City’s Employee Voluntary Waiver form.
10. Q: What makes an Employee Voluntary Waiver Form valid?
A: 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.
An employee waiver is effective on the date it is signed and is valid for one year.
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.
11. Q: Who qualifies as a Manager, Supervisor, or Confidential Employee?
A: The HCSO Regulations provide the following definitions:
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.
12. Q: What is the earnings requirement that goes along with the Managerial, Supervisorial, Confidential Employee exemption?
A: For Managerial, Supervisorial, or Confidential Employees to be exempt from the HCSO, they must earn at or above the following annual or hourly rate:
|| Hourly Salary
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 an exempt employee 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.
FAQ #12 amended on October 22, 2013
13. Q: What is the nonprofit employee exemption?
A: Nonprofit employees participating in bona fide training programs consistent with Federal Law, which training program will allow that employee to advance into a permanent position, shall be exempt from the definition of Covered Employee. A bona fide training program must be (a) subsidized by public funds from the federal, state, and/or local level, which funds are designated for training, workforce development, job readiness or similar purposes and (b) limited in duration as appropriate to the occupation for which the individual is being trained, taking into account the content of the training, and the prior work experience of the trainee.
A training program shall qualify for this exemption whether or not the program is training the employee to advance into a permanent position for the nonprofit or for another employer, but only where the Employer does not replace, displace or lower the wage or benefits of any existing position or Employee.
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