News & Events

Executive Order Requires Federal Contractors To Provide Paid Sick Leave After January 1, 2017

An Executive Order signed by President Obama requires federal contractors and subcontractors to offer up to seven days of paid sick leave per year to their employees working in the performance of a federal contract or subcontract. Whilethe leave requirement applies only to new federal contracts signed after January 1, 2017, it serves as a reminder for all employers to check state and local laws covering their workplaces for existing paid sick leave requirements. Four states (California, Connecticut, Massachusetts and Oregon), 19 cities and one county (Montgomery County, Maryland) currently have paid sick time laws on the books.

Under the Executive Order, covered employees of federal contractors and subcontractors must be permitted to use paid sick leave to care for themselves or a close family member or for absences resulting from domestic violence, sexual assault or stalking. Covered employees will be eligible to earn up to one hour of paid sick leave for every 30 hours of work, capped at no less than 56 hours per year. While carry-over of paid sick leave from year to year is required, there is no requirement that accrued, unused sick leave be paid at termination of employment. The Executive Order puts no cap on the number of days that may be carried-over; whether the regulations will do so remains to be seen. Employees rehired within 12 months after a job separation are entitled to reinstatement of accrued, unused paid sick leave.

The Executive Order calls for the Secretary of Labor to issue final regulations by September 30, 2016. In the interim, federal contractors that have an existing paid sick leave policy should confirm that the policy offers the minimum amount of paid sick leave required by the Executive Order. Federal contractors with noncompliant policies or without a paid sick leave policy should plan to adopt a compliant policy after regulations are issued and before January 1, 2017.

If you have any questions regarding your obligations as a federal contractor, please contact Jeffrey M. EmbletonAmy L. KullikJames A. Budzik or Ann E. Knuth in our Labor and Employment Group at (216) 523-1500.  

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