This Labor Day, President Obama issued an Executive Order requiring certain federal contractors that provide services or concessions to the federal government to implement paid sick leave policies that provide the following benefits to those contractors’ employees:

  • The accrual of one hour of paid sick leave for every 30 hours worked;
  • Annual accrual limits of no less than 56 hours a year (equivalent to seven, eight-hour work days);
  • Carry over of paid sick leave from one year to the next (although no payout of accrued sick leave is required upon an employee’s separation); and
  • Reinstatement of accrued sick leave for employees rehired by the covered contractor within 12 months after the job separation.

Although the Order is effective immediately, practically speaking, covered contractors vying for federal contracts have until January 1, 2017 to begin providing such benefits.

In addition to specifying the level of benefits to be provided, the Executive Order also sets forth the circumstances under which covered federal contractors’ employees’ may use the paid sick leave.  Specifically, contractors’ employees may take leave for purposes of:

  • Physical or mental illness, injury, or medical condition;
  • Obtaining diagnosis, care, or preventative care from a health care provider; or
  • Seeking counseling, relocation, or other victims services or legal assistance relating to domestic violence, sexual assault, or stalking.

And, employees may take mandated sick leave for their own, personal issues or to assist a family member or close associate whose relationship with the employee is the “equivalent of a family relationship” in dealing with illness, obtaining care, or seeking victim services.

Employers whose paid sick leave policies already provide for equal or greater benefits than those set forth in the Executive Order need not provide additional benefits to their employees.  But, employers should be careful to consider whether their policies actually provide for the same benefits as required under the Order, particularly in light of regulations the President has directed the Department of Labor (“DOL”) to issue next year implementing the Order.

Finally, covered federal contractors should be cognizant of the Order’s ban on employers’ interference with or discrimination on the basis of an employee’s taking or attempting to take mandated paid sick leave.  The Order also delegates to the DOL the authority to investigate potential violations of both the Order and the forthcoming implementing regulations.