San Francisco Employers: New Notice Requirement

Effective January 1, 2012, San Francisco employers will be required to post a new city-provided notice that explains employee rights and employer obligations under San Francisco’s Health Care Security Ordinance (HCSO). The HCSO requires covered employers to make health care expenditures for their covered employees.

This new notice requirement applies to all covered employers; generally businesses with 20 or more employees and nonprofit organizations with 50 or more employees. All persons who perform work for compensation during a given week must be counted in determining the size of the business, including employees who may work outside of San Francisco. This also applies to employers based outside of San Francisco but with employees who perform work within San Francisco’s geographical boundaries.

The notice must be posted at any workplace or job site where any covered employee works. The notice must be posted in English, Spanish Chinese and any other language spoken by at least five percent of the employees at the workplace or job site. There are additional significant changes effective January 1, 2012, especially for those employers who use a health reimbursement account (HRA) or a health saving account (HSA) to comply with the ordinance.

Some of the key revisions required for employers that use such accounts include:

• Keeping contributions available to the employee for a minimum of 24 months from the date of the contribution.
• Rolling over any December 31, 2011, account balance to January 1, 2012.
• Providing a detailed written account summary to the employee within 15 days of the date of contribution.
• Providing employees a written summary of their account within three days after termination of employment and making the funds available for a minimum of 90 days after termination of employment.

Employers that use such accounts should consult with legal counsel to prepare for January 1, 2012, compliance.

San Francisco’s Office of Labor Standards Enforcement (OLSE) will provide a revised FAQ [frequently asked questions] to assist employers.

More information, including the 2012 health care expenditure rate, can be found on OLSE’s website. CalChamber members can also look in HRCalifornia's HR Library.

Gail Cecchettini Whaley, CalChamber Employment Law Editor/Staff Counsel

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