Tuesday, September 8, 2015

Establishing Paid Sick Leave for Federal Contractors

Yesterday, the President signed an Executive Order (EO) requiring Government contractors to provide a minimum of seven days of paid sick leave per year. This action follows a growing trend among states that have begun requiring employers to offer similar benefits. Connecticut already has a similar plan and California began requiring employers to provide sick leave coverage beginning last July.

Under the President's EO, contractors and subcontractors must offer all employees, in the performance of the contract or subcontract, at least one hour of paid sick leave for every 30 hours worked up to seven days per year. We're not sure how this math works. 2,080 hours divided by 30 hours comes to 69 hours or about 81/2 days. We guess that this will be clarified in the forthcoming regulations.

Contractors cannot set a limit on accrued sick leave at less than 56 hours. Earned sick leave can be used for physical or mental illness, injury, or medical condition, obtaining diagnosis, care, or preventive care from a health care provider, caring for a child, a parent, a spouse, or a domestic partner who has any of those conditions, and domestic violence, sexual assault, or stalking.

Paid sick leave carries over from one year to the next and must be reinstated for employees rehired by a covered contractor within 12 months after a job separation. Contractors may be absorbing a new liability if they hire employees with accrued sick leave on the books.

The term "covered contractor" is a term used frequently in the EO although its not defined. We presume then that "covered contractor" means all contractors holding Government contracts. No size or small business exemption applies. That would be consistent with what the States are doing.

The provision will become effective on January 1, 2017. One estimate is that this will impact about 300,000 employees. That represents a small percentage of employees working on Government contracts, simply because most contractors have sick leave policies in place that exceed this new Executive Order.

To read the entire Executive Order, click here.

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