Employment & Labor Insider

The date for the U.S. Secretary of Labor to issue regulations establishing paid sick leave for covered employees of certain federal contractors is fast approaching.

By way of background, on September 7, 2015, President Obama signed Executive Order 13706, "Establishing Paid Sick Leave for Federal Contractors." The Executive Order requires certain federal contractors to provide their employees with up to 7 days of paid sick leave annually, including paid leave allowing for family care. Proposed regulations were issued this past February, as was a Fact Sheet.

The Executive Order directed that final regulations be issued by September 30, to take effect in 2017.

The proposed rule describes the following:

• The categories of contracts and employees covered by the Executive Order

• The rules and restrictions regarding the accrual and use of paid sick leave

• The obligations of contracting agencies, the U.S. Department of Labor, and covered federal contractors under the Order

• The remedies and enforcement procedures to implement the Order’s requirements.

While we wait to see what the final regulations will look like, here are some of the basics from the proposed rule.

What contracts are covered?

The Executive Order applies only to certain types of federal contractors, including the following:

• Procurement contracts for services or construction

• Contracts for services covered by the Service Contract Act

• Contracts for concessions, including concession contracts excluded by DOL regulations at 20 C.F.R. § 4.133(b)

• Contracts entered into with the federal government in connection with federal property or lands and related to offering services to federal employees or the general public.

Accrual for sick leave

Under the proposal, employees would accrue not less than one 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. The proposal also creates an option for contractors to provide employees with at least 56 hours of paid sick leave at the beginning of each accrual year rather than allowing employees to accrue the leave based on hours worked.

All covered contractors would be required to inform employees in writing of the amount of paid sick leave they have accrued at least once a month and at other times.

Interaction with other laws and Paid Time Off policies

The proposed regulations explain how the paid sick leave requirements interact with contractors’ obligations under the Service Contract Act, the Davis-Bacon Act, the Family and Medical Leave Act, and state or local paid sick time laws. If certain conditions are met, contractors’ existing PTO policies can fulfill the paid sick leave requirements of the Executive Order.

The DOL estimates "that about 828,200 employees would receive additional paid sick leave within five years of implementation of the proposed rule. This estimate includes approximately 436,700 employees who currently receive no paid sick leave and 391,400 employees who receive some paid sick leave, but would be entitled to receive additional paid sick leave. Because the rule will only applies to ‘new contracts,’ coverage will be phased in over multiple years. The Department estimate[s] that the vast majority of the universe of covered contracts will be covered within five years of implementation.”

Once the final regulations are issued, we'll be back with the details.