United States: The Department Of Labor Issues Proposed Regulations Implementing Paid Sick Leave For Federal Contractors

On February 25, 2016, the Department of Labor (DOL) announced its proposed regulations to implement Executive Order (EO) 13706, establishing paid sick leave for federal contractors. The proposed regulations describe the categories of contracts and employees covered by the EO, the rules and restrictions regarding the accrual and use of such paid sick leave, the obligations of contracting agencies, and the remedies and enforcement procedures available. The DOL has asked that any public comments about the proposed rule be submitted by April 12, 2016, in order to be reviewed prior to issuance of the final regulation.

What is Executive Order 13706?

On September 7, 2015, President Barack Obama signed EO 13706 requiring federal contractors and subcontractors to provide up to seven (7) days of paid sick leave for employees. In addition, each covered contract must incorporate a clause, which the contractor and any subcontractors shall incorporate into lower-tier subcontracts, specifying, as a condition of payment, that all employees falling under the purview of EO 13706 accrue not less than one (1) hour of paid sick leave for every 30 hours worked on or in connection with a covered contract. The EO directed the secretary of labor to issue regulations to implement its requirements.

Paid Sick Leave Procedures Under the Proposed Regulations and EO

A. Accruals

Under the proposed rule, employees accrue no less than one (1) hour of paid sick leave for every 30 hours worked on or in connection with a covered contract, to be calculated at the end of each workweek. A contractor is deemed to have complied with the proposed rule by providing an employee with at least 56 hours of paid sick leave at the beginning of the year. Employees are entitled to monthly notices in writing of the amount of paid sick leave they have accrued.

Contractors may cap accrual at 56 hours, although an employee must be permitted to carry over accrued, unused paid sick leave from one year to the next. Contractors are required to reinstate an employee's accrued, unused paid sick leave if the employee is rehired by the same contractor or a successor contractor within 12 months after a job separation. Contractors are not required to pay out a departing employee for accrued, unused paid sick leave.

B. Use

A covered employee may use paid sick leave for an absence resulting from:

  • Physical or mental illness, injury, or medical condition;
  • Obtaining diagnosis, care, or preventive care from a health care provider;
  • Caring for a child, a parent, a spouse, a domestic partner, or any other individual related by blood of affinity in need of care; or
  • Domestic violence, sexual assault, or stalking, if the time absent from work is for the purposes described above or to obtain additional counseling, to seek relocation, to seek assistance from a victim services organization, to take related legal action, or to assist an individual related to the employee engaging in any of those activities

Paid sick leave shall be provided upon the oral or written request of an employee that is made at least seven (7) calendar days in advance where the need for leave is foreseeable, and in other cases as soon as is practicable. Contractors must account for the use of paid sick leave in increments of no greater than one hour and must provide employees using paid sick leave with the same pay and benefits they would have received if they had not used the leave. A contractor may only require certification for absences of three or more consecutive days.

If certain conditions are met, contractors' existing PTO policies can fulfill the paid sick leave requirements.

Which Contracts Are Covered?

The new sick leave rules apply to "new" contracts with the federal government performed within the United States and entered into on or after January 1, 2017. A "new" contract is one that results from solicitations issued on or after January 1, 2017, or that is awarded outside the solicitation process on or after January 1, 2017. A contract entered into before January 1, 2017, however, may constitute a new contract if on or after January 1, 2017:

  • The contract is renewed;
  • The contract is extended, unless the extension is made pursuant to a term in the contract as of December 31, 2016, providing for a short-term limited extension; or
  • The contract is amended pursuant to a modification outside the scope of the contract.

The paid sick leave requirements apply to a new contract that is:

  • A procurement contract for construction covered by the Davis-Bacon Act (DBA);
    The EO does not apply, however, to contracts that are subject only to the Davis-Bacon Related Acts, i.e., Acts under which federal agencies provide financial and other assistance to construction projects through grants, loans, guarantees, insurance and other methods, but do not directly procure construction services.
  • A contract for services covered by the Service Contract Act (SCA);
    Both procurement and non-procurement contracts that are subject to the SCA and its implementing regulations are subject to the EO's requirements.
  • A contract for concessions, including any concessions contract excluded from coverage under the SCA by DOL regulations at 29 CFR 4.133(b); or
    Concessions contracts include, but are not limited to, contracts with the principal purpose of furnishing food, lodging, automobile fuel, souvenirs, newspaper stands, and/or recreational equipment, regardless of whether the services are of direct benefit to the government, its personnel, or the general public.
  • A contract in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.
    This category of covered contracts refers to leases of federal property, including space and facilities, and licenses to use such property entered into by the federal government for the purpose of offering services to federal employees, their dependents, or the general public.

Under the proposed regulations, the paid sick leave requirements apply to subcontracts of covered prime or upper-tier contracts if the subcontract is one of the four types of covered contracts referenced above.

The proposed regulations contains certain narrow exclusions from coverage for the following types of contractual agreements: (1) grants; (2) contracts and agreements with and grants to Indian tribes under Public Law 93-638; (3) any procurement contracts for construction that are not subject to the DBA (i.e., procurement contracts for construction under $2,000); and (4) any contracts for services, except for those otherwise expressly covered by the proposed rule, that are exempted from coverage under the SCA or its implementing regulations. The proposed regulation also provides that the EO does not apply to contracts subject to the Walsh-Healey Public Contracts Act.

Which Employees Are Covered?

Pursuant to the regulations, the paid sick leave requirements apply to employees performing work "on or in connection with" covered contracts and whose wages under those contracts are governed by the DBA, SCA, or FLSA, including employees qualifying for an exemption from the FLSA's minimum wage and overtime provisions. Employees performing "in connection with" a covered contract include those performing work necessary to the performance of a covered contract, but who are not directly engaged in performing the special services called for in the contract. The accrual requirements do not apply to employees who perform work "in connection with" covered contracts and who spend less than 20 percent of their hours worked in a workweek performing in connection with such contracts.

What Does This Mean For Covered Employers?

The DOL estimates that about 828,200 employees will receive additional paid sick leave within five years of implementation of the proposed rule. The EO and proposed regulations may require covered employers to provide more sick leave than is required by laws that have been recently enacted in many states.

Among the remedies available for violations of the EO and the proposed regulations are monetary damages, liquidated damages, and equitable relief. To avoid any such damages, employers engaged in federal contracting should (1) review sick leave or PTO policies; (3) train Human Resources personnel, supervisors, and managers on the requirements, and (3) ensure that all covered contracts set forth the clauses required by the regulations.

The Department Of Labor Issues Proposed Regulations Implementing Paid Sick Leave For Federal Contractors

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Duane Morris LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Duane Morris LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions