Proposed Rules for Establishing Paid Sick Leave for Federal Contractors - Part 1

Last September, the President signed an executive order that will require Government contractors and subcontractors to provide a minimum of seven days of paid sick leave per year (see Establishing Paid Sick Leave for Federal Contractors). These new benefits are scheduled to become effective in January 2017 and is estimated to impact about 300,000 employees. That is a small subset of the employees working on Government contracts because most contractors already have sick leave policies that exceed the Executive Order minimums.

Yesterday, the Labor Department published draft regulations to implement the Executive Order. The proposed rule (i) describes the categories of contracts and employees the Order covers and excludes from coverage, (ii) sets forth requirements and restrictions governing the accrual and use of paid sick leave, (iii) prohibits interference with or discrimination for the exercise of rights under the executive order, (iv) describes the obligations of contracting agencies, the Department of Labor, and contractors, and (v) establishes the standards and procedures for complaints, investigations, and remedies, and administrative enforcement proceedings related to alleged violations of the Order.

This is a fairly extensive set of regulations so we will take a couple of days to summarize and pluck out the salient points that will affect small business Government contractors. First, we'll discuss the types of absences for which the seven days can be used.

Paid sick leave under the proposed regulations may be used by an employee for absence resulting from a variety of conditions and situations. These are about as broad as anyone can make them.

1. a physical or mental illness, injury, or medical condition
2. obtaining diagnosis, care, or preventive care from a health care provider
3. caring for a child, a parent, a spouse, a domestic partner, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship who has any of the conditions or needs for diagnosis, care, or preventive care described above or is otherwise in need of care
4. domestic violence, sexual assault, or stalking, if the time absent from work is for the purpose of obtaining counseling, seek relocation, seek assistance from a victim services organization, or take related legal action, including preparation for or participation in any related civil or criminal legal proceeding or to assist an individual related to the employees as described in item 3 above.

Unused sick leave carries over from one year to the next (with limitations we'll discuss later) and reinstated by a "covered" contractor if rehired within twelve months after a job separation. Use of sick leave cannot be contingent upon finding a replacement to cover any work missed. Sick leave required by these new regulations are in addition to a contractor's obligations under the Service Contract Act (SCA) and Davis-Bacon Act (DBA) and contractors may not receive a "credit" toward their prevailing wage or fringe benefit obligations under those Acts for any paid sick leave provided under these regulations.

We will continue this discussion next week.