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New Paid Sick Leave Requirement for Federal Contractors

On September 7, 2015, President Barack Obama signed an Executive Order requiring federal contractors and subcontractors to provide their employees with a minimum 7 days of paid sick leave annually, to be accrued at a rate of at least 1 hour of paid sick leave for every 30 hours worked. Although the Executive Order was signed September 7, 2015, it applies only to contracts solicited or awarded on or after January 1, 2017.

The Executive Order's stated purpose is "to increase efficiency and cost savings in the work performed by parties that contract with the Federal Government by ensuring that employees on those contracts can earn up to 7 days or more of paid sick leave annually, including paid sick leave for family care."

According to the Executive Order, however, it only applies to a contract if it is:

  • a procurement contract for services or construction;

  • a contract for services covered by the Service Contract Act;

  • a contract for concessions; or

  • a contract entered into with the federal government in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

In addition, the wages of employees under the above-mentioned contracts must be governed by the Davis-Bacon Act, the Service Contract Act, or the Fair Labor Standards Act in order for the paid sick leave requirements to apply.

Pursuant to the Executive Order, executive departments and agencies must ensure that any applicable contracts include a provision setting forth that, as a condition of payment, all of the contractor's employees working under the contract shall accrue a minimum of one hour of paid sick leave for every 30 hours worked. The Executive Order also requires that the contractor and any subcontractors incorporate the paid sick leave provision into any lower-tier subcontracts. Furthermore, the paid sick leave provided to employees must carry over from one year to the next. Upon separation from employment, a contractor does not need to pay an employee for accrued sick leave. If, however, an employee is rehired within 12 months of job separation, the accrued sick leave must be reinstated.

The paid sick leave may be used by the employee not only for absences resulting from the employee's medical condition, but also to provide care for a family member, including a child, parent, spouse, or domestic partner who has a medical condition. In addition, the employee may use the paid sick leave to recover from domestic violence, sexual assault, or stalking. The contractor or subcontractor must allow an employee to take paid sick leave if the employee makes an oral or written request 7 calendar days in advance, and the request includes the expected length of the leave. If the employee cannot provide 7-days' advance notice because the need for leave was not foreseeable, then the employee must make the request for leave as soon as is practicable.

For absences of three or more consecutive workdays resulting from an employee's medical condition or care of a family member, an employer can require a certification from a healthcare provider. If three or more consecutive days of paid sick leave is used by an employee because of domestic violence, sexual assault, or stalking, the employer may require the employee to provide supporting documentation from an appropriate individual or organization.

The Secretary of Labor now has a September 30, 2016, deadline to issue regulations necessary and appropriate to carry out the Executive Order. Federal contractors and subcontractors with paid sick leave policies that do not afford employees with the amount of paid sick leave provided for in the Executive Order should begin reviewing any necessary changes they may need to make to comply with the new requirements starting January 1, 2017.

Gonzalez Saggio & Harlan LLP | Copyright © 2019

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About this Author

Gregory Gilmore, Commercial, ERISA, Employment Attorney Gonzalez Saggio Law Firm
Partner

Gregory B. Gilmore’s primary practice areas include complex commercial litigation, ERISA litigation, and employment and labor law, representing management exclusively. He has been part of the defense team in a number of employment discrimination and harassment matters, both in the Courts in New Jersey and New York, and before the EEOC and state and local anti-discrimination agencies. He has also litigated cases related to the enforcement of favorable arbitration and non-compete agreements. In addition, Mr. Gilmore has conducted workplace investigations of...

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