• Federal Contractors Must Now Comply with New Paid Sick Leave Laws
  • March 13, 2017 | Author: Joshua Carl Schmand
  • Law Firm: Lerch, Early & Brewer, Chartered - Bethesda Office
  • Employment & Labor Legal Update

    Employers entering into new contracts with the federal government after January 1, 2017, must update their sick leave policies to comply with Executive Order 13706, which establishes paid sick and safe leave for employees of federal contractors.

    Employers in the Washington, DC metropolitan area are familiar with sick and safe leave laws as both Montgomery County, Maryland, and the District of Columbia have their own versions of these laws. Unfortunately, these three laws are not identical, making compliance for government contractors in this region even more challenging.

    The Details

    The executive order applies to employees performing work on or in connection with four major categories of contractual agreements that are new on or after January 1, 2017:
    • Procurement contracts for construction covered by the Davis-Bacon Act (DBA);
    • Service contracts covered by the McNamara-O’Hara Service Contract Act (SCA);
    • Concessions contracts; and
    • Contracts in connection with Federal property or lands and related to offering services for federal employees, their dependents, or the general public.
    Under the executive order, employers must provide employees with 56 hours of paid leave in one of two ways: (i) either accrued at a rate of at least one hour of leave for every 30 hours worked; or (ii) provided as a lump sum of 56 hours at the beginning of each year.

    Employers must permit employees to carryover accrued unused paid sick leave from one year to the next but may limit or cap the total amount of paid sick leave that employees may accrue to 56 hours each year. Leave carried over from the previous accrual year does not count toward the 56 hour accrual limit in the next accrual year. This means that an employer using the accrual method does not need to provide additional paid sick leave to an employee who is carrying over 56 hours of leave into the next year, until the employee uses some of the paid sick leave. However, employers providing paid sick leave as a lump sum instead of through the accrual method, may not cap the amount of paid sick leave provided.

    The law requires employers to permit employees to use paid sick leave for work absences resulting from any of the following reasons:
    • Physical or mental illness, injury, or medical condition.
    • Obtaining diagnosis, care, or preventative care form a health care provider.
    • Caring for a child, parent, spouse, domestic partner, or any other individual related by blood or affinity whose close association with an employee is the equivalent of a family relationship who has a condition or need for diagnosis, care, or preventative care.
    • Domestic violence, sexual assault, or stalking, if the time absent from work is for the purposes described above or to obtain additional counseling, seek relocation, seek assistance from a victim services organization, take related legal action, or assist an individual related to an employee in engaging in any of these activities.
    In addition to the accrual and carryover requirements, the executive order also provides:
    • Employees may request leave by any method reasonably calculated to provide notice.
    • Employees must request leave seven days in advance for foreseeable leave or as soon as is practicable if not foreseeable.
    • An employee need not find a replacement worker to use paid sick leave.
    • Denials of leave must be communicated in writing with an explanation for the denial.
    • Certifications may be required for leave of three or more consecutive days.
    • Employers must keep extensive records.
    Nothing in the executive order requires an employer to compensate an employee for unused accrued paid sick leave upon a separation from employment.

    Complying with Existing Montgomery County or DC Leave Policies

    As previously mentioned, DC’s and Montgomery County’s sick and safe leave laws are not identical nor or either identical to Executive Order 13706. Thus government contractors performing covered federal contracts in either DC or Montgomery County must tailor their paid sick leave policies to comply with both the Executive Order and the local law. And government contractors with employees in both jurisdictions can choose to have one policy for DC employees and one policy for Montgomery County, Maryland employees or one policy that provides leave on terms permissible under all three laws. Below is a summary of the differences between the Montgomery County and D.C.’s sick and safe leave laws.

    How DC's Act Differs
    • There is no cap on carryover of accrued and unused paid sick and safe leave.
    • Accrual of paid leave is based on employer size:
      • For employers with 100 or more employees, employees accrue at least one hour of paid leave for every 37 hours worked, not to exceed 7 days per calendar year.
      • For employers with at least 25, but not more than 99 employees, employees accrue at least one hour of paid leave for every 43 hours worked, not to exceed 5 days per calendar year.
      • For employers with 24 or fewer employees, employees accrue at least one hour of paid leave for every 87 hours worked, not to exceed 3 days per calendar year.
    • Employers must keep records of employees’ earned sick and safe leave for three years.
    • Notices must be posted in all languages spoken by 3% of or 500 individuals in DC, whichever is less.
    How Montgomery County’s Act Differs
    • Use of paid sick and safe leave may be capped at 80 hours in a calendar year.
    • Employees may also use paid sick and safe leave for:
      • Closing of an employer’s place of business or an employee’s child’s school or child care center due to a public health emergency.
      • Caring for a covered individual when a healthcare provider has determined that the family or family member’s presence in the community would endanger the public.
      • For the birth of a child, or for the placement of a child with an employee for adoption or foster care.
      • To care for a newborn, newly adopted, or newly placed child within one year of birth, adoption or placement.
    • Employers must keep records of employees’ earned sick and safe leave for three years.
    • Notices must be posted in English, Spanish, and any other language necessary.
    Takeaway

    Now is the time for federal contractors to update (or create) their paid sick leave policies. While it may seem alluring to demur on updating their sick leave policies because the Executive Order only impacts contracts that are new on or after January 1, 2017 and it is unclear whether the current administration will enforce, revise, or withdraw the Executive Order, the Executive Order is currently in effect and imposes substantial requirements on employers employing federal contractors.