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San Francisco Releases 2024 Expenditure Rates for Health Care Security Ordinance

San Francisco has released the required 2024 expenditure rates for its Health Care Security Ordinance (HCSO).

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 not considered a valid health care expenditure.

Employers with self-funded health plans must calculate the value of those plans, and pay any necessary top-offs, by February 28th each year for the prior calendar year. For more information contact your OneDigital Consultant. Details and training are also provided in the Self-funded Employers section of the city's website.

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 2023 Expenditure Rate 2024 Expenditure Rate
Small: Businesses with 0-19 employees and nonprofits with 0-49 employees Exempt Exempt
Medium: Businesses with 20-99 employees and nonprofits with 50-99 employees $2.27 per hour payable $2.34 per hour payable
Large: All employers with 100 or more workers $3.40 per hour payable $3.51 per hour payable

As a reminder, 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 covered by the HCSO for any calendar quarter if it meets the following three conditions:

  • Employs one or more workers within the geographic boundaries of the City and County of San Francisco
  • Is required to obtain a valid San Francisco business registration certificate, and
  • Is a for-profit business with 20 or more employees or a nonprofit organization with 50 or more employees. The employer must count all employees for this purpose – not just those working in San Francisco

An employee is considered to be a covered employee if they work for a covered employer and:

  • Is entitled to be paid the minimum wage
  • Has been employed by their employer for at least 90 calendar days
  • Performs at least eight hours of work per week within the geographic boundaries of San Francisco; and
  • Does not meet one of the exemption criteria

Employer Reporting Requirement

Covered employers are required to submit an Annual Reporting Form each year by April 30th. Even employers who already meet minimum spending requirements through their company-paid premiums are required to do annual reporting.

Filing is done online, with regulators typically making the form available by April 1 each year. Once the form is available, employers can sign up for email notification each year at

The reporting asks for details on the number of employees eligible for HCSO as well as the company’s spending on health care premiums and contributions to HSAs or the San Francisco-run City Option.

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, and date of the 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.


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

Violation 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

If you have questions about your HCSO compliance responsibilities, contact your OneDigital consultant.
Looking for more information about compliance changes impacting San Francisco? Read: Permanent Emergency Leave Takes Effect in San Francisco.