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San Francisco Health Care Security Ordinance (HCSO) Annual Reporting Due April 30

The San Francisco Health Care Security Ordinance (HCSO) establishes four primary employer health care obligations and creates a health access program.

All employers covered by the HCSO must:

  • meet Employer Spending Requirements (ESR) by making required health care expenditures on behalf of all covered employees;
  • maintain records showing compliance with the ESR;
  • post a notice in the workplaces with covered employees; and
  • submit an annual reporting form to the Office of Labor Standards Enforcement (OLSE).

Covered Employers and Employees

An employer is a covered under the HCSO for any calendar quarter in which it: (1) employs one or more workers within the geographic boundaries of the City and County of San Francisco; (2) is required to obtain a valid San Francisco business registration certificate; and (3) is a for-profit business with 20 or more persons performing work or a nonprofit organization with 50 or more persons performing work. When counting persons performing work, the employer must take into account all employees regardless of job status and whether or not they are located in San Francisco.

Under the HCSO, an employee is considered a covered employee if he or she works for a covered employer and: (1) is entitled to be paid the minimum wage; (2) has been employed by the employer for at least 90 calendar days; (3) performs at least eight hours of work per week in San Francisco; and (4) does not meet any of the exemption criteria. These rules apply regardless of immigrations status, so even undocumented employees can be deemed covered employees.

Employer Spending Requirement

The HCSO requires covered employers to spend a certain dollar amount on health care (i.e. medical, dental, vision, prescription drug) for its covered employees. The minimum health care expenditure for each covered employee is determined quarterly by multiplying the employee’s total number of payable hours in the quarter by the applicable health care expenditure rate. Payable hours include hours paid and hours entitled to payment, such as paid time off or paid leave, earned within San Francisco. Covered employers must make irrevocable health care expenditures each quarter no later than 30 days after the end of the preceding quarter. Simply providing additional pay to the employee is a not a valid health care expenditure.

Note: Compliance with the HCSO employer spending requirements does not alleviate the need for applicable large employers to comply with the Affordable Care Act (ACA) Employer Shared Responsibility provisions. Additionally, amounts paid for health care expenditures that satisfy the ACA may not fully satisfy the HCSO employer spending requirement.

Employer Size

2020 Expenditure Rate 2021 Expenditure Rate
Small: Businesses with 0-19 Employees

Nonprofits with 0-49 Employees



Medium: Businesses with 20-99 Employees

Nonprofits with 50-99 Employees


per payable hour


per payable hour

Large: Businesses with 100+ Employees

Nonprofits with 100+ Employees


per payable hour


per payable hour

Notice and Record Retention Requirements

Covered employers must post the unaltered official OLSE notice in a conspicuous place at any workplace where any covered employee works. Additionally, for a period of four years from each covered employee’s date of employment, a covered employer must keep the following records: (1) itemized pay statements; (2) the employee’s address, telephone number, date of first day of work; (3) records of health care expenditures made; (4) documentation supporting any employee exemption; and (5) documentation of quarterly health care expenditures.

Annual Reporting

Annually, by April 30th of each year, covered employers must submit an annual, web-based reporting form to the OLSE. For additional information on completing the annual reporting form, see Employer Annual Reporting Form Instructions.


Failure to comply with the HCSO may result in maximum administrative penalties for the following violations:


Maximum Penalty

Failure to make the required minimum Health Care Expenditures within five business days of the quarterly due date (30 days after the conclusion of each quarter) $100.00 for each employee for each quarter that the violation occurred
Failure to submit the Annual Reporting Form $500.00 for each quarter that the violation occurs
Retaliation against employees $100.00 for each person who is the target of the prohibited action for each day the violation occurs
Refusing to allow OLSE access to employer records $25.00 for each worker whose records are not provided for each day the violation occurs
Failure to maintain or retain accurate and complete records $500.00 for each quarter that the violation occurs
Failure to post the Official HCSO Notice $25 per day for each workplace or job site where the Notice is not posted

For the most up-to-date information on the HCSO, please visit the San Francisco HCSO site.

DOWNLOAD THE INFOBRIEF: San Francisco Health Care Security Ordinance (HCSO) Requirements