Tuesday, October 11, 2016

Labor Issues Final Rules on Paid Sick Leave for Federal Contractors

The Department of Labor's Wage and Hour Division issued the final rules on paid sick leave for Federal contractors. These new sick leave rules were based on the President's similarly titled Executive Order from September 2015.

These new rules cover contracts subject to the Service Contracting Act (SCA) and the Davis-Bacon Act (DBA) as well as concessions contracts and a few other obscure types of contracting.

Under the final rule, employees will accrue one hour of paid sick leave for every 30 hours worked on or in connection with a covered contract up to a maximum of seven days or 56 hours. For contractor employees not required to maintain time records, they are presumed to work a 40 hour workweek. Contractors that don't like this presumption have a few months to implement a timekeeping system.

Contractors can provide employees with at least 56 hours of paid leave at the beginning of each accrual year or allow employees to accrue leave based on hours worked. The former option is probably easier to implement.

The final rule provides that contractors may limit the amount of paid sick leave employees may accrue to 56 hours each year and must permit employees to carry over accrued, unused paid sick leave from one year to the next. However, the final rule also permits contractors to limit the amount of paid sick leave employees have accrued to 56 hours at any point in time. That's confusing because if a contractor grants 56 hours at the beginning of the accrual year, any carry-over would be lost because the amount would exceed 56 hours. We're sure clarification will be forthcoming on this issue.

Contractors are required to reinstate employees' accrued, unused paid sick leave if the employees are rehired by the same contractor within 12 months after a job separation unless contractors provide payment to employees for accrued, unused paid sick leave upon separation. Contractors are not required to pay employees for accrued, unused paid sick leave at the time of job separation (i.e. cash out). If they do provide cash-out, they will not be required to reinstate unused leave.

Sick leave may be used for all the usual reasons; illness, injury, medical condition, and obtaining diagnosis for self and/or family. Leave may be taken in increments of one hour and the only limitation is the number of hours accrued. Employees do not earn sick leave while taking sick leave.

Requests to use sick leave must be made at least seven calendar days in advance where the need is foreseeable and in other cases, as soon as practicable. Most contractors will probably establish more lenient procedures for requesting sick leave.

You can read a lot more on WHD's website.

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