In September 2016, the U.S. Department of Labor (DOL) issued its Final Rule implementing President Obama’s Executive Order 13706, “Establishing Paid Sick Leave for Federal Contractors (EO).” The EO requires that for federal contracts issued on or after January 1, 2017, federal contractors and subcontractors must provide their employees “not less than 1 hour of paid sick leave for every 30 hours worked on or in connection with covered contracts,” up to 56 hours of paid sick leave per year. In the Final Order, DOL describes the rules and restrictions regarding the accrual and use of paid sick leave.
So far, President Trump has taken no steps to change the EO’s requirements. Therefore, this law remains in full force and effect for most federal contracts and task orders that are renewed or newly issued in 2017.
The EO’s paid sick leave requirement applies to work on or in connection with “covered contracts,” meaning federal contracts and subcontracts subject to the Davis-Bacon Act (DBA) and the Service Contract Act (SCA), as well as federal contracts for concessions and for services on federal property. There also is a list of federal government contracts that are not covered by this EO. See link below. If their government contracts are covered, employers must provide the paid sick leave to both FLSA-exempt and non-exempt employees. Recognizing that employers typically do not track exempt employees’ hours worked, the EO provides that the employer may assume that, for purposes of calculating paid sick leave, its exempt employees worked 40 hours on or in connection with a covered contract each week.
Significantly, the paid sick leave required by the EO is in addition to the contractor’s obligations under the SCA and DBA. The contractor will receive no credit toward its fringe benefit or prevailing wage obligations under those laws for providing the paid sick leave mandated by this EO. A contractor’s existing paid time off policy may satisfy the requirements of the EO only if the paid time off meets all of the EO’s requirements for paid sick leave.
Under the EO, any unused paid sick leave must carry over from one accrual year to the next up to a maximum accrual of 56 hours. A contractor is not required to pay out unused paid sick leave upon termination of employment or at the end of the year.
The employee is entitled to use the paid sick leave for: their own illnesses and other health care needs; the care of a family member or loved one who is ill or needs health care; or purposes resulting from being the victim of domestic violence, sexual assault, or stalking, or to assist a family member or loved one who is such a victim. The EO broadly defines the relations for whom an employee may use paid sick leave to include the employee’s child, parent, spouse, domestic partner, or “any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”
An employee who wants to use accrued paid sick leave should make a request at least 7 calendar days in advance, if the need for leave is foreseeable, or as soon as practicable if the need is not foreseeable. The employer can require that the employee provide information to establish that the absence qualifies for paid sick leave, and if feasible, the anticipated duration of the leave. However, the employer may not require certification from a health care provider or documentation to prove a claim of domestic violence, sexual assault, or stalking unless the employee uses 3 or more full days of leave consecutively.
The DOL has published a notice that covered employers must post notifying their employees of their rights to paid sick leave. In addition, the EO requires that employers notify their employees of their accrued paid sick leave balances at the end of every pay period or each month, whichever is shorter.
The Final Rule implementing the EO has many other, detailed requirements not covered by this Legal Alert. Therefore, we recommend consulting the DOL’s Fact Sheet at https://www.dol.gov/govcontracts/eo13706/PaidLeaveFS.htm, and/or consulting a labor and employment lawyer for advice.