Final rule gives seven days of paid sick leave to federal contractors’ employees

The Department of Labor has released a final rule implementing Executive Order 13706, “Establishing Paid Sick Leave for Federal Contractors,” signed by President Barack Obama on September 7, 2015. The final rule implements the requirement in EO 13706 that certain parties contracting with the federal government provide employees up to seven days of paid sick leave annually. Employees will earn one hour of paid sick leave for every 30 hours worked that may be taken if they are sick, need to care for a sick family member, or must see a doctor or take a family member to a medical appointment. Paid sick leave may also be taken for reasons related to domestic violence, sexual assault, or stalking.

The final rule “reflects leading practices by major employers, states, and localities throughout the country,” according to a White House fact sheet. The Labor Department noted that five states—California, Connecticut, Massachusetts, Oregon, and Vermont—and more than two dozen cities, counties, and towns have paid sick time laws requiring employers to permit leave for short-term health needs and preventive care. The White House estimates that the final rule will extend paid sick leave to 1.15 million people working on federal contracts, including nearly 600,000 employees who currently lack even one day of paid sick leave.

The new regulation applies to all covered contracts solicited and awarded on or after January 1, 2017. Announcing the final rule, the DOL highlighted these aspects of its requirements:

• Provides up to 56 hours of paid sick leave per year to an estimated 1.15 million employees of federal contractors, including an estimated 594,000 employees who currently receive no paid sick leave.

• Ensures that employers have choices in how to best adapt the paid sick leave requirement to their businesses. For example, employers can choose to let workers accrue leave over time, or to frontload leave for ease of administration.

• Includes flexibilities related to integration with employers’ existing paid time off policies and leave provisions in existing collective bargaining agreements (CBAs).

• Improves the health and performance of employees of covered federal contractors and brings benefits packages offered by those federal contractors in line with leading firms, ensuring that they remain competitive in the search for dedicated and talented employees.
• Protects the public health by ensuring that covered federal contractors’ employees, customers,
and clients are able to stay home when they are sick.

Purposes for which leave may be taken. According to the DOL’s paid leave summary, paid leave pursuant to EO 13706 may be taken for absences due to short-term illness or injury and to support preventive health care for the employee and the employee’s children or other family members; it also may be taken for “safe time” for the employee to address the impact of domestic violence, sexual assault, or stalking of the employee and/or a family member of the employee, such as to attend court proceedings.

Covered employees are permitted to use leave for their own care as well as to care for 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. Under the rule, an equivalent family relationship includes a grandparent, grandchild, brother or sister-in-law, fiancée, cousin, aunt, or uncle, as well as other people with whom the employee has a significant personal bond that is or is like a family relationship, regardless of biological or legal relationship.

Covered employers. In an overview, the Labor Department notes that the final rule applies to employers entering into new contracts—those in which the solicitation was issued or contract was awarded—on or after January 1, 2017. Employers working under contracts covered by the Service Contract Act or the Davis-Bacon Act, concessions contracts, and service contracts in connection with federal property or lands must meet the final rule’s requirements. Said differently, all contracts covered by Executive Order 13658, “Establishing a Minimum Wage for Contractors,” will also be covered by the final rule.

Existing CBAs. The final rule does not apply to employees working on contracts covered by a CBA that provides at least 56 hours of paid sick time or paid time off that can be used for health-related reasons until January 1, 2020, or the date the CBA terminates, whichever is sooner. The DOL said that the grace period comes in response to commenters’ requests for consideration of the inability of employers operating with CBAs to unilaterally amend existing paid sick leave policies.

Multiemployer plans. The final rule also permits contractors to fulfill their obligations under the rule jointly with other contractors by utilizing multiemployer plans in order to provide access to paid sick leave as required by the final rule—a provision that also responds to commenter requests.

Additional resources. In conjunction with the release of the final rule, the Labor Department has also issued fact sheets, frequently asked questions, a workplace poster, a video, and other related resources on a dedicated webpage.

“Part of the basic bargain of America is that if you work hard, you should be able to take care of your family,” said Secretary of Labor Thomas E. Perez. “Paid sick leave helps workers recover from illness, or be there for their families, whether it’s to take an elderly parent to the doctor or to stay home with a young child with a fever. It allows working families to focus on what really matters most without having to worry about the next paycheck.”

SOURCE: 81 FR 67598, September 30, 2016.

Visit our News Library to read more news stories.