Executive Order Mandates Paid Sick Leave

On Labor Day, President Obama issued an Executive Order that increases paid time out for employees of federal contractors. In legislation similar to that enacted in recent years in municipalities, cities, and states across the country, Executive Order 13706 mandates that federal contractors provide paid sick leave on an accrual basis. More specifically, employees must be able to accrue one (1) hour of paid sick leave for every 30 hours worked. While the Order states that its goal is to ensure that employees on federal contracts “can earn up to 7 days or more of paid sick leave annually,” it requires that contractors “not set a limit on the total accrual of paid sick leave per year, or at any point in time, at less than 56 hours.” Thus, the Order mandates a minimum of seven (7) paid days, but permits an employer to allow accrual of a larger number of days. Although the paid time is not required to be paid out when an employee separates from employment, it must be eligible for carry-over from year to year if unused, and must be reinstated if an employee separates and is rehired by the same employer within twelve (12) months. In addition to time needed for an employee resulting from his or her own “physical or mental illness, injury or medical condition,” the Order permits a broad range of uses, such as obtaining diagnostic or preventive care; “caring for a child, a parent, a spouse, a domestic partner, or other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship” and who needs care for an illness, injury or condition, or diagnostic or preventive care “or is otherwise in need of care;” or for recovery from or attending to matters related to domestic violence, sexual assault, or stalking, whether for the employee or any of the members of the employee’s family as defined above. Notably, the Order’s definition of those whom the employee may use paid time to care for – individuals “related by blood or affinity whose close association with the employee is the equivalent of a family relationship” – is among the most expansive of any similar legislation.

Paid sick leave will be required to be provided upon the oral or written request of an employee, which request should include the expected duration of the leave and be made at least seven calendar days in advance where the leave is foreseeable, and “in other cases as soon as practicable.” The employer cannot require that the requesting employee find a replacement to cover the work to be missed. If an employee is absent for three or more consecutive work days, the employer is permitted to request certification from a healthcare provider (if the absence is related to a medical condition) or documentation from the appropriate individual or organization containing the “minimum” information necessary to establish a need for the employee to be absent from work (if the absence is related to domestic violence, sexual assault, or stalking). The Order specifically requires that the employer “shall not disclose any verification information and shall maintain confidentiality about any domestic violence, sexual assault, or stalking, unless the employee consents or if disclosure is required by law.”

The Executive Order is effective immediately, but applies only to covered federal contracts solicited or awarded on or after January 1, 2017. Its coverage is intended for employees who work on covered contracts, which are defined as:

1. procurement contracts for services or construction;
2. contracts or “contract-like instruments” for services covered by the Service Contract Act;
3. contracts or “contract-like instruments” for concessions; and
4. contracts or “contract-like instruments with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.”

Additionally, to be covered by the Order, the wages of employees under the above categories of contracts or “contract-like instruments” must be governed by the Davis-Bacon Act, the Service Contract Act, or the Fair Labor Standards Act. It is noteworthy that employers with pre-existing collective bargaining agreements are not exempt from compliance.

The Order directs the Secretary of Labor to issue regulations by September 30, 2016. These regulations must define the terms used in the Order and set forth recordkeeping obligations for covered employees. The Order grants the DOL the authority to investigate potential violations of the Order and ensure compliance. Within 60 days of the Secretary of Labor issuing such regulations, the Federal Acquisition Regulatory Council shall issue regulations in the Federal Acquisition Regulation.

Gibbons will continue to follow this Order and the anticipated regulations.