January 19, 2012

Updates for California Employers

San Francisco Health Care Security Ordinance

Not only have there been modifications to the expenditure rates and wage adjustments for 2012, as well as guidance applicable to the use and utilization of health reimbursement arrangements, the City and County of San Francisco’s Labor Standards Enforcement (OLSE) has released several more 2012 updates relating to the Health Care Security Ordinance (HCSO):

  • New Reporting Requirement.  As a means to offset the costs of HCSO, some covered employers impose a surcharge on receipts of goods and services they sell instead of raising their selling prices.  Beginning in 2012, covered employers imposing such surcharge on customers to cover, in whole or in part, health expenditures must include the following information in their annual reports to the OLSE:
  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 exceeds the amount spent on employee health care, the covered employer will be required to either pay or designate an amount equal to that difference for health care expenditures for its employees.

  • New Posting Requirement.  Covered employers are required to post an “Official OLSE Notice” at each of their workplaces and job sites.  The notice simply provides a short explanation to employees that their employers are required to pay certain minimum amounts toward employee health care expenditures.  The Official Notice must be posted in at least 3 languages: English, Spanish and Chinese. The Notice must also be posted in Tagalog, Russian or Vietnamese when at least 5% of employees at a workplace or job site speak that particular language.  The model “Official OLSE Notice” has been translated to all six languages and is available for downloading or printing via OLSE’s website.
  • New FAQs.  Details about the new reporting and posting requirements, as well as other recent changes to the HCSO are available in a new set of Frequently Asked Questions.

New Employer Notice Obligation imposed by Wage Theft Protection Act

The recently enacted California Wage Theft Protection Act of 2011, which took effect January 1, 2012, imposes a new employer notice obligation.  An employer is required to provide a written notice to certain employees, at the time of hiring, that includes the following information:

  1. The rate and basis of pay whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime.
  2. Allowances claimed as part of the minimum wage, including meal or lodging allowances.
  3. The regular payday designated by the employer.
  4. The name of the employer, including any “doing business as” names.
  5. The physical and mailing address of the employer’s main office or principal place of business.
  6. The telephone number of the employer.
  7. The name, address, and telephone number of the employer’s workers’ compensation insurance carrier.

Any changes to this information must be provided within 7 days of the change, unless the changes are reflected in a timely wage statement, or notice of the change is provided in writing in accordance with another law within 7 days of the change.

For purposes of this law, “employee” does not include:

  • Individuals employed directly by the state or any political subdivision of the state, including any city, county, city and county, or special district.
  • Employees who are exempt from overtime.
  • Employees who are covered by a collective bargaining agreement if certain conditions are met.

The California Labor Commissioner has developed a model notice template that can be used to satisfy the notice obligation, as well as provided some Frequently Asked Questions relating to the notice.  The model notice is available via the California Department of Industrial Relations website in English, Spanish, Chinese, Korean, Vietnamese and Tagalog.


The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.