On September 7, 2015, President Obama signed an executive order
requiring federal contractors and subcontractors to offer their
employees paid sick leave. The leave requirements in the executive
order apply to new federal contracts entered into after January 1,
2017, with certain limited exceptions. For example, grants,
agreements with and grants to Indian Tribes under the Indian
Self-Determination and Education Assistance Act, and contracts or
contract-like instruments expressly excluded by the implementing
regulations issued by the Secretary of Labor are excepted from the
order's requirements. The order directs the Secretary of Labor
to issue regulations implementing the requirements of the order by
September 30, 2016.
Key Provisions of the Executive Order
The executive order mandates that federal contractors offer both
their full-time and part-time employees up to seven days of paid
sick leave per year. Executive departments and agencies are
directed to ensure that new contracts, contract-like instruments,
and solicitations include a clause, which the contractor and any
subcontractors must incorporate into lower-tier subcontracts,
specifying, as a condition of contract payment, that all employees,
in the performance of the contract or any subcontract thereunder,
will earn not less than one hour of paid sick leave for every 30
hours worked. Eligible employees are permitted to use the paid sick
leave to care for themselves and to care for a family member, such
as a child, parent, spouse, or domestic partner, or another loved
one, and for absences resulting from domestic violence, sexual
assault, or stalking.
Paid sick leave accrued pursuant to the order carries over from one
year to the next and must be reinstated for employees rehired
within 12 months after a job separation. The order does not contain
a cap on the amount of sick leave that may be accrued by a covered
employee. A contractor is not required to pay a covered employee
for accrued, unused sick leave on termination.
Contractors will be required to provide the paid leave upon the
oral or written request of a covered employee when the request
includes the expected duration of the leave and is made at least
seven calendar days in advance when the need for the leave is
foreseeable, and in other cases as soon as is practicable. When
employees use paid sick leave lasting three or more consecutive
workdays to care for themselves or to care for a family member,
domestic partner, or other loved one, a contractor may require a
certification issued by a health care provider verifying the need
for leave. The certification is to be provided no later than 30
days from the first day of the leave. If three or more consecutive
days of paid sick leave are used for an absence resulting from
domestic violence, sexual assault, or stalking, a contractor may
require documentation from an appropriate individual or
organization with the minimum necessary information establishing a
need for the employee to be absent from work. The contractor is
required not to disclose any verification information and must
maintain confidentiality about the domestic violence, sexual
assault, or stalking, unless the employee consents or disclosure is
required by law.
The order also contains a prohibition against covered contractors
interfering with, discriminating against, or retaliating against an
employee for taking, or attempting to take, paid sick leave
provided for under the order or for asserting, or assisting any
other employee in asserting, any right or claim related to the
order.
It also is worth noting that a contractor's existing paid leave
policy provided in addition to the fulfillment of Service Contract
Act or Davis-Bacon Act obligations and made available to all
covered employees will satisfy the requirements of the order if the
amount of available paid leave complies with the order and if the
leave may be used for the same purposes and under the same
conditions as outlined above.
Practical Implications
The White House estimates that approximately 300,000 workers will
begin receiving paid sick leave because of the order. It is
important that employers expecting to be subject to the new paid
sick leave requirements plan ahead for the implementation of the
order's requirements, including budgeting for sick pay
expenditures and revising applicable policies and procedures.
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.