Paid Sick Leave Rules for Federal Contractors Expected in September

Last year, President Obama signed Executive Order 13706 (EO) to establish paid sick leave for federal contractors. The Executive Order requires certain federal contractors to provide their employees with up to 7 days (56 hours) of paid sick leave per year, including paid leave allowing for family care. By September 30, 2016, the proposed regulations that will implement the EO are expected to be finalized. The regulations will apply to contracts issued on or after January 1, 2017, but federal contractors may wish to review existing policies and procedures and begin preparing for upcoming administrative responsibilities.

The paid sick leave requirements apply to four types of contracts: (1) procurement contracts covered by the Davis-Bacon Act; (2) service contracts covered by the Service Contract Act; (3) concession contracts; and (4) contracts in connection with federal property that are related to offering services for federal employees, their dependents, or the general public.

The regulations allow federal contractors to award employees paid sick time in one lump sum of 56 hours at the beginning of the measuring year or allow employees to accrue 1 hour of paid sick leave for every 30 hours worked on or in connection with a covered contract. A federal contractor may limit sick leave accrual to 56 hours per year. A contractor’s existing paid time off policy may satisfy these requirements.

Under the proposed rule, an employee may use paid sick leave because of:

  • a physical or mental illness, injury, or medical condition
  • obtaining diagnosis, care, or preventive care from a health care provider
  • caring for a child, parent, spouse, domestic partner, blood relative or an individual whose close association with the employee is the equivalent of a family relationship
  • obtaining services related to domestic violence, sexual assault, or stalking

Beginning next year, federal contractors will also be required to post a notice to employees of the paid sick leave requirements. Federal contractors should also ensure they are in posting compliance with these laws:

  • Section 503 Final Rule (prohibiting discrimination in employment against qualified individuals with disabilities)
  • VEVRRA Final Rule (prohibiting discrimination in employment against protected veterans)
  • EO 13672 Final Rule (prohibiting discrimination in employment on the basis of sexual orientation or gender identity)
  • EO 13665 Pay Transparency Final Rule (prohibiting discrimination in employment against applicants and employees that discuss compensation)
  • EO 13658 Federal Contractor Minimum Wage (increasing federal contractor minimum wage rate)

Compliance Poster Company’s Federal Service and Manufacturing Contracts Poster (#74625), Federal Construction Contracts Poster (#74626) and Federal Service Contract Poster (#74788) meet the needs of most federal contractors. Look for updates to these posters to include a paid sick leave notification later this year.

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