Paid Sick Leave For Federal Contractors’ Employees

On Labor Day, September 7, 2015, President Obama issued a new executive order requiring that federal contractors and subcontractors allow their employees to earn up to seven (7) or more days of paid sick leave annually. New federal contracts after January 1, 2017 will include a clause, which will also apply to subcontractors, requiring that all employees working on a federal contract earn at least one (1) hour of paid sick leave for every 30 hours worked. The employer will not be able to set a limit on the total accrual of paid sick leave per year at less than 56 hours.

The paid leave can be used by employees, not only for their own health issues, but also to care for a 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.

Paid sick leave accrued under the executive order must be allowed to carry over from one year to the next, and must be reinstated for employees who are rehired within 12 months after a job separation.

The paid sick leave required by the executive order is in addition to a contractor’s obligations under the Service Contract Act and Davis-Bacon Act. Contractors may not receive credit toward their prevailing wage or fringe benefit obligations under those Acts for any paid sick leave provided in satisfaction of the requirements of the order.

Paid sick leave will need to be provided upon the oral or written request of an employee that includes the expected duration of the leave, and which is made at least seven (7) calendar days in advance where the need for the leave is foreseeable, and in other cases as soon as is practicable.

Employers will not be required to pay any accrued unused sick leave required by the executive order at the time of employment separation.

Employers who interfere with or retaliate against employees seeking to use sick leave will be subject to legal action. Thus, a new potential source of legal liability against covered employers will be created, in that employees who are terminated will be able to make claims that it was because they used sick leave.

The Secretary of Labor will issue regulations on sick leave for federal contractors by September 30, 2016.