News & Events

Notice of Proposed Rulemaking: Federal Contractors Required to Provide Paid Sick Leave

Last month, the DOL published proposed rules establishing paid sick leave for federal contractors in accordance with Executive Order 13706 signed by President Obama. The deadline for comments on the proposed rules has been extended to April 12, 2016. A renewal of the Healthy Families Act objectives, the goal is to provide employees working on federal contracts with at least 7 days of paid leave for illness or family care.

Scope. The proposed rules would apply to employees who work on or in connection with new federal contracts awarded on or after Jan. 1, 2017 covered by the Service Contract Act or the Davis-Bacon Act, concessions contracts and service contracts in connection with federal property or lands. In short, contract coverage would be the same as Executive Order 13658, Establishing a Minimum Wage for Contractors, provided the employee spends at least 20% of their working hours in a particular workweek performing work in connection with a covered contract.

Absences Covered.  There are a broad set of limitations in which paid sick leave may be used by an employee resulting in absence. Further, the use of paid sick leave cannot be contingent on the employee seeking paid sick leave to find a replacement. Absences that will result in paid sick leave will include:

*  Physical or mental illness, injury, or medical condition;

*  Obtaining diagnosis, care, or preventative care from a health care provider;

*  Caring for a child, parent, 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 preventative care described above, or is otherwise in need of care.

The regulations also expand paid sick leave for an illness, injury or condition of the employee, or for the employee to obtain care for an illness, injury or condition, where the condition or care results from domestic violence, sexual assault, or stalking; for those seeking assistance from a victim services organization or to prepare or commence legal action as a consequence of domestic violence, sexual assault, or stalking; or to assist an individual related to the employee who is a family member who undertakes any of these actions as a result of domestic violence, sexual assault or stalking.

Requirements for requesting leave. Under the proposed regulations, paid sick leave shall be provided upon the oral or written request of an employee that includes the expected duration of the leave, and is made at least seven (7) calendar days in advance where the need for the leave is foreseeable, and in other cases as soon as is practicable.

Employer Responsibilities. The proposed rule provides two options for accruing paid sick leave, an accrual method and a “lump-sum” method. Under the accrual method, the employee will accrue not less than one hour of paid sick leave for every 30 hours worked on all covered contracts plus nonworking time on which the employee is paid. For full-time exempt employees, accruals can be calculated on actual hours worked (if tracked) or on an assumed 40 hours worked each workweek. Under the “lump sum” method, an employee must be provided with at least 56 hours of paid sick leave at the beginning of each accrual year. Paid sick leave will carry over from one accrual year to the next and carried over sick leave will not count toward any limit the contractor sets on annual accrual. However, an employer can place a limit on the amount of paid sick time an employee can accrue, provided that the cap is not less than 56 hours of paid sick leave per accrual year. The proposed rule allows the employer to select the 12-month period to use as the accrual year.

Further, the proposed rule requires federal contractor employers to inform their employees of their accrued sick leave balances no less than monthly.

Enforcement. No private right of action is created under the proposed regulations. Complaints for noncompliance must go through the DOL’s administrative process. Penalties can include backpay and reinstatement of last wages and benefits, liquidated damages in an amount equal to all other monetary relief ordered, and debarment.

While many employers already provide paid sick leave benefits, those who are federal contractors are encouraged to review their policies in light of the proposed regulations and either amend their existing policy or be prepared to adopt a new paid sick leave policy. For further information, please contact Mansour Gavin’s Labor and Employment Practice Group.


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