We have reported
time again on the national trend of mandating paid sick leave
for workers. As we
noted last March, in a 2015 Executive Order, President Obama directed
the U.S. Department of Labor (DOL) to issue regulations requiring
federal contractors to provide paid sick leave to their employees.
The DOL issued a final rule on September 29, 2016, which will
mandate up to seven days of paid sick leave for covered
The new rule, which is estimated to impact between 694,000 and 1.15
million federal contractor workers, is more generous than many
other sick leave mandates implemented by state and local
governments in recent years. The federal rule requires employers to
provide at least one hour of paid sick leave for every 30 hours of
work, up to at least 56 hours (seven days) per calendar year. The
leave may be used for:
Episodes of physical or mental
Visits to health care providers for
Caring for a sick family member
Responding to and caring for the
consequences of domestic violence, sexual assault, or stalking,
including time off to pursue legal action or to seek relocation
The rule also permits employees to carry over any accrued, but
unused, sick time from year to year, although employers can still
cap the total accrual amount at 56 hours per year. Furthermore, if
an employee is separated but rehired by the same contractor within
12 months, contractors are required to reinstate any amount of
unused paid sick leave accrued prior to the separation (unless the
contractor already paid the employee for accrued, unused paid sick
leave). Generally however, no contractor is required to pay out
employees for any unused sick leave at termination, as long as its
policies do not otherwise require it.
Unsurprisingly, the new rule is over 460 pages long, and, given
our limited space (and your likely attention span), we cannot
possibly describe all issues contractors may face in light of these
sick leave requirements. However, some of the important issues
include interplay with Family and Medical Leave Act requirements,
conflicts with state and local rules, effect of collective
bargaining agreements, and more. Additionally, while most federal
contracts will be required to implement these new rules on any new
contracts as of January 1, 2017, there are some exceptions in the
new rule. If there is any concern or confusion about the rule's
applicability, we suggest contacting legal counsel to ensure
accurate compliance and avoidance of fines, penalties, and –
at worst – debarment.
You may have also noticed that the DOL's accrual rate and
minimum cap are more aggressive than most other rules across the
country. For example, the new ordinances in Cook County and the City of Chicago require that employees accrue
one hour of paid sick leave for every 40 hours worked with a
minimum cap of 40 hours (five days) per year, and only require that
employers permit 20 hours (two and a half) days of carryover each
year. This dichotomy between federal and local sick leave mandates
will cause administrative difficulties for multi-jurisdictional
employers, particularly those with federal contracts. There are
several solutions to handling this patchwork of rules, depending on
an employer's past practice, workplace culture, and bottom
line, but consultation with counsel is recommended to ensure
Stay tuned as more paid sick leave issues come into play around
the country in the coming months and years.
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.
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