Executive Summary
Overview: President Obama signed an Executive Order requiring federal contractors to offer their employees up to seven (or more) days of paid sick leave per year, beginning on January 1, 2017.
Coverage: Federal Contractors
Effective Date: The mandates apply to all contracts beginning on or after January 1, 2017.
Action Required: If you are a federal contractor or sub-contractor you should begin thinking about the policy you are going to implement to comply with the new law. If you already have a Pad Time Off (PTO) policy (which does or does not include time off for sick reasons), think about whether you are going to maintain one all-inclusive PTO policy, or maintain a separate policy strictly for sick time. Also, begin considering how you will track accrual balances. We will also be providing clients with a model policy after the implementing regulations are published.
The Details
Relevant provisions of the Executive Order are as follows:
- All new “contracts” will include a clause (which all contractors and subcontractors shall incorporate into lower-tier subcontracts) specifying that, as a condition of payment, all employees shall earn not less than 1 hour of paid sick leave for every hour 30 hours worked (though contractors would be free to offer more generous amounts at their discretion).
- Contractors may not limit annual paid sick leave accrual at anything less than 56 hours.
- Paid sick leave can be used for an absence resulting from:
- Paid sick leave shall carry over, and shall be reinstated for employees rehired within 12 months of job separation.
- Use of paid sick leave cannot be made contingent on requesting employee finding a replacement.
- The paid sick leave under this EO is in addition to a contractor’s obligations under the Service Contract Act and the Davis-Bacon Act, and 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 EO.
- An existing paid leave policy will satisfy the requirements of the EO if the amount of paid leave is sufficient to meet the requirements of the EO and if it may be used for the same purposes and under the same conditions.
- Paid sick leave shall be provided on the oral or written request of an employee, made at least 7 calendar days in advance where the need is foreseeable, and in other cases, as soon as it is practicable.
- A contractor may require certification of the need for leave by a health care provider for employee absences of 3 or more consecutive workdays, to be provided no later than 30 days from the first day of leave.
- Similarly – if 3 or more days of consecutive leave is used related to domestic violence, sexual assault, or stalking, an employer may require that documentation be provided from “an appropriate individual or organization” establishing a need for the employee to be absent from work.
- No payout of accrued but unused paid sick leave is required upon separation from employment.
- The EO mandates shall not supersede any Federal, State, Municipal law or collective bargaining agreement requiring greater paid sick leave or leave rights than those established by the EO.
The EO directs the Secretary of Labor to issue regulations enforcing the EO by September 30, 2016, setting forth any exclusions from the requirements where appropriate, as well as definitions and recordkeeping requirements as needed to enforce the provision. The Secretary also will have authority to investigate potential violations of the EO and obtain compliance with the measure, including its proscriptions on discrimination or interference.
As always, please contact your Human Resources Business Partner if you have any questions.
This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice.