Terry L. Mann, Attorney

On September 7, 2015, President Obama signed Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors.  The Executive Order requires companies that contract with the federal government to provide their employees with up to seven days of paid sick leave annually, including paid leave allowing for family care. The Executive Order directs the Secretary of Labor to issue regulations by September 30, 2016, and the notice of proposed rulemaking was issued in March.

What will the new rules require?

The new rules require employers that contract with the federal government to provide up to 56 hours of paid sick leave to employees each year.  The term "contractor" refers to both a prime contractor and all of its first or lower-tier subcontractors on a contract with the federal government. Employees will accrue one hour of paid sick leave for every thirty hours they work on, or in connection with, a covered contract. Alternatively, a covered employer may award 56 hours of paid sick leave at the beginning of the year, and let employees utilize it as needed.

What contracts are covered?

The new regulations will apply to both new contracts and contracts that are renewed, extended, or changed on or after January 1, 2017.  Four major contract categories are covered: (1) procurement contracts for construction covered by the Davis-Bacon Act; (2) services contracts covered by the McNamara-O'Hara Service Contract Act; (3) concessions contracts; and (4) contracts in connection with federal property or lands or services, including leases.

What leave is required?

Covered employers must allow employees to use the paid sick leave for their own physical or mental illness, injury, or medical condition; to obtain a diagnosis, care, or preventative care from a health care provider; to care for a family member or a person in an "equivalent" relationship who is ill or needs health care, including preventative care; or (4) because of domestic violence, sexual assault, or stalking, or to assist a family member or "equivalent" person who is such a victim.

What happens to unused sick leave?

Employees may carry over unused paid sick leave from one year to the next, capped at 56 hours.  If an employee leaves or is terminated, the employer is not required to pay the departing employee for the unused sick leave.  If the employee is reinstated within twelve months, however, the employer must restore the accrued paid sick leave.

What does an employee have to do in order to utilize the paid sick leave?

If possible, the employee is required to give seven days advance notice of the absence, either orally or in writing.  If the need for leave is not foreseeable, then the employee has to give the employer notice as soon as practicable.  Employers will be required to respond to the request "immediately or within a few hours."  Employers may require an employee who is absent for three or more consecutive days to provide a certification from a health care provider or appropriate individual or organization, if the absences are due to domestic violence, sexual assault, or stalking.  

What is an employer required to do?

Employers are required to tell employees how much accrued paid sick leave they have available at least monthly, as well as whenever a request is made to use the leave.  Employees can also request that information as often as weekly, and must be informed about their leave remaining upon separation and any reinstatement of paid leave. Any denial of a leave request must be communicated in writing, with an explanation for the decision. Employers are precluded from discriminating or retaliating against employees who request or utilize the paid sick leave.  Contractors who engage subcontractors for federal contracts must require compliance by the subcontractors.  If a contract specifies compliance as a prerequisite to payment, submitting a claim for payment when the sick leave requirements are not met may give rise to a claim under the False Claims Act. Violation of the requirements may result in debarment for up to three years.

My company already provides paid sick leave. Doesn't that fulfill our obligation?

Maybe. If the company's paid sick leave is available in the same quantity, and is able to be used for all the same reasons as the paid sick leave required by the Executive Order. It would be prudent to evaluate your sick leave policies to be sure that you are in full compliance prior to January 1, 2017.