2012 Labor Law Changes for S.F.

There are 2 important labor law changes happening on Jan. 1st, 2012 in San Francisco:

  • Minimum Wage is increased to $10.24/hour
  • Health Care Security Ordinance Rates are increasing for all non-exempt businesses (you are exempt if you have 19 or fewer employees)

Here is the message we received from the Office of Small Business:

The Office of Small Business wants to make sure that you are aware of several key updates and new regulations in San Francisco labor laws, effective January 1, 2012.
New Minimum Wage: $10.24/Hour
Beginning January 1, 2012, all employers must pay to each employee who performs work in San Francisco (including temporary and part-time employees) wages not less than $10.24 per hour.  The minimum wage requirement, set forth in the San Francisco Minimum Wage Ordinance, applies to adult and minor employees who work two (2) or more hours per week.  Each year, the City will adjust the amount of the minimum wage based on increases in the regional consumer price index.
If you should have any questions or require additional information, please contact the Office of Labor Standards Enforcement (OLSE) at (415) 554-6292 or Email MWO@sfgov.org.  Please click here for the new 2012 Minimum Wage poster, which must be posted in a visible area where employees can easily read.
New Health Care Security Ordinance (HCSO) Expenditure Rate: $1.46/Hour (20-99 Employees)

The Health Care Security Ordinance (HCSO) requires Covered Employers to spend a minimum amount of money each quarter on their Covered Employees’ health care.  Beginning January 1, 2012, health care expenditure rate for large employers (100+ employees) will be $2.20/hour.  For medium-sized employers (20-99 employees), the rate will be $1.46/hour.  Employers with 19 or less employees are exempt from the HCSO requirements. Please refer to the HCSO website for details, and the Frequently Asked Questions regarding the Employer Spending Requirement of the San Francisco Health Care Security Ordinance.

Please email HCSO@sfgov.org or call 554-7892 with any questions regarding your rights and responsibilities under the San Francisco Health Care Security Ordinance.

New HCSO Regulations
Posting:

Beginning January 1, 2012, new HCSO provisions take effect.  Below is a summary of the key changes, but for more details, visit the OLSE website at www.sfgov.org/olse/hcso, or contact the OLSE at (415) 554-7892 or hcso@sfgov.org.

All “Covered Employers” (i.e. businesses with 20 or more employees) are subject to the HCSO and must post an Official OLSE Notice at every workplace.  You can download and print a copy of the Official OLSE Notice at www.sfgov.org/olse/hcso.

HRA Accounts:
The following provisions apply to businesses that utilize Health Reimbursements Accounts (HRAs) to satisfy, in whole or in part, the HCSO spending requirement.

In order for HRA contributions to qualify as health care expenditures, all of the following criteria must be met:

1) Any HRA funds available at the end of 2011 must roll-over to 2012;
2) The contributions must be reasonably calculated to benefit the employee;
3) The contributions must remain available to the employee for a minimum of twenty-four months from the date of the contribution;
4) The employee must receive a written summary of the contribution within 15 days of the date of the contribution; and
5) Upon separation, employees must be provided with a written summary of their account within 3 days, and the funds must remain available for a minimum of 90 days.

Businesses with Surcharges:
The following provisions apply to businesses that impose a surcharge on customers to cover, in whole or in part, the costs of the HCSO spending requirement.

  • You will be required to report two pieces of data to the OLSE during the annual reporting process: 1) the amount of money collected from the surcharge for employee health care and 2) the amount of money spent on employee health care.
  • If the amount collected from the surcharge is greater than the amount spent on employee health care, the Covered Employer must irrevocably pay or designate an amount equal to that difference for health care expenditures for its employees.

Please contact the Office of Small Business for further details.

Office of Small Business
City Hall, Room 110
1 Dr. Carlton B. Goodlett Place
San Francisco, CA 94102

www.sfgov.org/osb