On September 30, 2016, the Department of Labor (DOL) issued a final rule implementing Executive Order 13706, “Establishing Paid Sick Leave for Federal Contractors,” which requires certain federal contractors to provide their employees with up to seven days (56 hours) of paid sick leave annually, including paid leave for family care. The DOL estimates that the rule will provide paid sick leave to approximately 1.15 million workers employed by federal contractors.

The final rule describes the categories of contracts and employees now subject to the paid sick leave requirements. The rule applies to new contracts and replacements for expiring contracts that result from solicitations issued on or after January 1, 2017. It applies to four categories of government contracts provided that employees’ wages are governed by the Davis-Bacon Act, Service Contract Act or Fair Labor Standards Act: (1) procurement contracts for construction covered by the Davis-Bacon Act; (2) service contracts covered by the Service Contract Act; (3) concessions contracts, including those excluded from coverage under the Service Contract Act; and (4) contracts in connection with federal property or lands and related to offering services for federal employees, their dependents or the general public. The final rule does not apply to contracts for the manufacturing or furnishing of materials, supplies or equipment to the government.

Workers may use paid leave to recover from illness, take care of a sick family member or attend a doctor’s visit. Workers may also use paid sick leave for reasons related to domestic violence, sexual assault or stalking. Sick leave will carry over from year to year, but employers are not required to pay out for unused sick leave when employees leave the company. Employers also cannot make the use of sick leave contingent on employees finding a replacement to cover their work. Employees can take up to two consecutive days of sick leave before employers can require a doctor’s certificate or other form of certification. Employers cannot interfere with an employee’s accrual or use of sick leave.

The final rule also provides requirements and restrictions governing the accrual and use of paid sick leave. Employers have choices in how to best adapt the paid sick leave requirement to their businesses. For example, employers may allow workers to accrue sick leave over time or offer paid sick leave at the beginning of each year for ease of administration. Employers must keep detailed records related to the final rule, including employee data, hours worked, deductions made, notifications of accrued paid sick leave, and dates and amounts of paid sick leave used by employees. Employers must retain these records for three years. The final rule also establishes the procedures applicable to complaints, investigations, remedies and administrative enforcement proceedings. This final rule will become effective on November 29, 2016, but will be applicable only after the effective date of regulations to be issued by the FAR Council. (81 Fed. Reg. 67,598, 09/30/16)