New Executive Order Mandating Sick Leave for Government Contractors

On September 7, 2016, President Barack Obama signed Executive Order 13706 which will mandate Paid Sick Leave for Federal Contractors in future procurements. Basically, the regulation will apply to all new contracts for services and construction, as well as .,ct-like instruments for services covered by the Service Contract Act, Davis-Bacon Act or the Fair Labor Standards Act. It mandates that contractors must ensure employees on those contracts can earn up to 7 days or more per year of paid sick leave. This includes leave for family care. It further specifies that these employees shall earn not less than 1 hour of paid sick leave for every 30 hours worked. These hours can accrue and be carried over from year to year if unused (up to a limit of 56 hours). The order does specify that the contractor is not obligated to pay the employee for any unused hours upon termination, however.

The paid sick leave under this Executive Order may be used for the following:

• Physical or mental illness, injury or medical condition of the employee
• Obtaining diagnosis, care or preventative care from a health care provider by the employee
• Caring for the employee’s child, parent, spouse, 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 need for diagnosis, care, or preventative care described above
• Domestic violence, sexual assault or stalking if the time absent from work is for the purposes described above or to obtain additional counseling, seek relocation, seek assistance from a victim services organization, take related legal action or assist an individual related to the employee as described above in engaging in any of these activities

The employer must allow employees to take this paid sick leave in increments as small as one hour. The employee can request the sick leave either orally or in writing and should be made at least 7 days in advance when foreseeable. The employer may request certification for absences of three or more consecutive full days.

This Executive Order will affect an estimated 1.15 million workers. It will be effective on all new contracts, or revisions to contracts, issued on or after Jan. 1, 2017. The Executive Order does not apply to grants; contracts and agreements with and grants to Indian Tribes under the Indian Self-Determination and Education Assistance Act. Enforcement of the Executive Order may include penalties and/or debarment.

So what does all of this mean? To many contractors it may just reinforce a program already in place. To some, including many small businesses, it will increase the amount of sick leave that the employer needs to guarantee to each employee. This will add to overhead. The good news is that your competitor will also have to have this same benefit. To all contractors, it means yet another regulation to pay attention to and comply with in order to do business with the Federal Government.