President Obama has now issued an Executive Order requiring federal contractors (and subcontractors) to offer up to 7 days of paid sick leave each year. This new requirement will not apply, however, until January 1, 2017, and only to contracts bid on or received in 2016 or later.
Paid Sick Leave for Federal Contractors
The Department of Labor must still undertake rulemaking to implement the Executive Order. However, here is a summary of the new sick leave requirement for federal contractors:
- Employees earn at least 1 hour of paid sick leave for every 30 hours worked.
- Employers may not “cap” the accrual of sick leave at or less than 56 hours.
- The paid leave can be used for the employee’s own illness or to obtain “diagnosis, care, or preventive care from a healthcare provider.”
- The paid leave also may be used to care for or to obtain a diagnosis or preventative care for a family member, which is defined to include anyone “related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”
- The paid leave also may be used to recover from or seek assistance for incidents of domestic violence, sexual assault or stalking.
- The paid leave cannot be made contingent on the employee finding a replacement to cover the missed time
- The paid leave can carry over to successive years (subject to the 56-hour cap).
- The paid leave need not be paid out at termination, although employees who are rehired within 1 year are entitled to have their paid leave reinstated.
Questions remain about how the mandatory sick leave will interact with employer-provided PTO and other leave mandated by state or local law. It appears, however, that contractors who already provide sick leave benefits (and presumably PTO) will not be required to do anything more as long as their policies meet or exceed what the Executive Order requires.
Bottom Line
It is interesting to note that the Executive Order kicks in after President Obama’s term expires, so it remains to be seen whether his successor will be as committed to this new benefit for federal contractors’ employees.
Nevertheless, the move is expected to spur Congressional debate over the “Healthy Families Act,” which would require all businesses with 15 or more employees to offer up to 7 paid sick days each year.
We will continue to monitor this story as it develops.