Executive Order Requires Paid Sick Leave for Federal Contractor Employees

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Executive Order Requires Paid Sick Leave for Federal Contractor Employees

On Sept. 7, 2015, President Obama issued an executive order requiring federal contractors and subcontractors (federal contractors) to offer paid sick leave to their employees. This order applies to new contracts (including contract-like instruments and solicitations) entered into on, or after, Jan. 1, 2017.

The Administration believes that this requirement will align employee benefits offered by federal contractors with the practices of private employers and lead to improved economy and efficiency in government procurement.

Paid Leave Requirement

The executive order requires federal contractors to provide their employees with at least seven days or 56 hours of paid sick leave per year. Under the order, federal contractors will be required to award their employees with one hour of paid leave for every 30 hours of actual work. However, higher minimum paid leave accrual limits may apply whenever required by collective bargaining agreements or applicable federal, state or local laws.

Paid sick leave under this order must carry over from one year to the next and must be reinstated for employees who are rehired by an affected contractor within 12 months of employment separation. However, federal contractors will not be required to pay employees for unused paid sick leave upon separation of employment.

Finally, the executive order states clearly that the obligation to provide paid sick leave is in addition to, not instead of, any obligations delineated by the Service Contract Act (SCA) or the Davis-Bacon Act (DBA). For example, contractors may not claim the value of providing paid leave as a credit against their prevailing wage or fringe benefit obligations, but they could count any paid leave it currently offers to its employees, in addition to SCA or DBA obligations, in the number of paid leave hours required by this order.

Using Paid Leave

Employees working for federal contractors will be allowed to use their accrued paid leave when they are absent because of:

  • A physical or mental injury, illness or medical condition;
  • The need to obtain a diagnosis, care (or preventive care) from a health care provider;
  • The need to care for a child, parent, spouse domestic partner or any other individual related by blood or affinity; or
  • Domestic violence, sexual assault or stalking, if the time absent from work is for the reasons described above or to obtain additional counseling, seek relocation, seek assistance from a victim services organization, take related legal action (including preparation for or participation in civil or criminal legal proceedings) or assist an individual related to the employee in engaging in any of the activities previously mentioned.

Employers cannot require their employees to find a replacement to cover any work time they miss when they use paid sick leave. However, employees who wish to use paid sick leave must request using this benefit at least seven calendar days in advance when the need for leave is foreseeable or as soon as practicable in other cases.

In addition, the order allows federal contractors to require their employees to provide a certification justifying the use of paid leave. However, the certification must be issued by a health care provider and may be required only for employee absences of three or more consecutive days. If applicable, employees must provide this certification within 30 days of the first day of leave.

Finally, the executive order prohibits federal contractors from interfering with or discriminating against employees who take, or attempt to take, paid sick leave or in any manner use or assert any right given to them by the executive order.

Implementation

The executive order applies to federal contracts entered into on or after Jan. 1, 2017. In addition, the Administration has ordered the U.S. Department of Labor (DOL) to issue regulations for implementing the order by Sept. 30, 2016. DOL regulations may include any definition, exclusion and recordkeeping requirement the DOL deems necessary to monitor and enforce compliance with this executive order.

For more information and updates, visit Employee Benefits.

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