DOL Issues Final Rule on Paid Sick Leave for Federal Contractors

On September 30, 2016, the U.S. Department of Labor’s (DOL) Wage and Hour Division published the Final Rule implementing Executive Order 13706, which requires covered federal contractors to provide up to seven days (56 hours) of paid sick leave annually to all employees. The DOL predicts that the Final Rule, effective on November 29, 2016, will provide paid sick leave to 1.15 million employees, including 594,000 employees who do not currently receive paid sick leave.

The Executive Order applies to new contracts and replacements for expiring contracts that result from solicitations, or contracts awarded outside the solicitation process, issued on or after January 1, 2017. It also covers those who are exempt from the FLSA’s minimum wage and overtime provisions. However, it does not apply to employees working on contracts covered by a collective bargaining agreement (CBA) that provides at least 56 hours of paid sick leave until January 1, 2020, or the CBA termination date, whichever occurs first.

Summary of Paid Sick Leave Terms under Final Rule:

• Time accrued:  employees will accrue 1 hour of paid sick leave for every 30 hours worked, for up to 56 hours in a year.
• Permitted use:  for employee’s own illnesses and other health care needs (includes preventive care); for the care of a family member or loved one (e.g. close friend) who is in need of health care; for purposes resulting from being the victim of domestic violence, sexual assault, or stalking (i.e. can include seeking counseling, relocation, or legal services)—or to assist a family member or loved one who is a victim of such behavior.
• Carry-over:  employees can carry over up to 56 hours of unused paid sick leave from year to year while they work for the same contractor.
• Cash-out:  contractors will not be required to pay employees for any unused paid sick leave when they leave their job.
• Time used:  employees can use as little as an hour, or as much as all paid sick leave they have accrued, at a time.
• Certification:  employers may require that employees using paid sick leave provide certification from a health care provider.
• Anti-retaliation:  employers may not interfere with the accrual or use of paid sick leave.

For additional information on Executive Order 13706 and the Final Rule, including a Fact Sheet, FAQs, as well as some other helpful links, be sure to stop by the DOL website and consult with your legal expert to determine what these new requirements mean for your organization.

By Bryce Hansell, Associate Consultant and Jeff Henderson, Associate Consultant