The U.S. Department of Labor (DOL) has released its Notice of Proposed Rulemaking (NPRM) to implement Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors. The NPRM (currently 286 pages in length) will be published in the Federal Register on Thursday, February 25, 2016, and allows for a brief comment period of only 30 days. Final DOL regulations are due by September 30, 2016, after which the Federal Acquisition Regulatory Council will have to amend the Federal Acquisition Regulation to incorporate the paid sick leave obligations into the required government contracts. Due to the brevity of the comment period, we are providing this high-level summary now and will offer a more detailed analysis in the days to come.
Executive Order 13706, which President Obama signed on September 7, 2015, provides for up to seven days of paid sick leave annually for employees working on certain federal contracts, including lower-tier subcontracts. The executive order directs that employees shall earn 1 hour of paid sick leave for every 30 hours worked for a total of no less than 56 hours of paid sick leave per year. Additionally, the executive order stipulated that such paid sick leave could be taken for an absence: (i) due to a physical or mental illness, injury or medical condition; (ii) to obtain care, diagnosis or preventative care from a health care provider; (iii) to care for a child, domestic partner, parent, spouse or other individual related by blood or affinity which is equivalent to a family relationship; or (iv) to obtain counseling, seek relocation, obtain other assistance from victim services, or take legal action for domestic violence, sexual assault, or stalking.
The DOL notes in the NPRM that it conducted listening sessions with interested stakeholders representing both worker advocates and employers as it developed its proposal. The NPRM contains five parts: (1) general topics such as definitions, coverage and exclusions; (2) federal government requirements; (3) requirements for contractors such as providing paid leave, including a contract clause, recordkeeping, and maintaining a list of accrued paid sick leave; (4) enforcement, including investigations, to be conducted by the Wage and Hour Division; and (5) administrative procedures including a dispute mechanism for contractor compliance, debarment proceedings, and hearings before an administrative law judge and the Administrative Review Board. The proposal would add part 13 to Title 29 of the Code of Federal Regulations (C.F.R.).
With respect to coverage, the NPRM explains that, subject to certain exclusions, the paid sick leave obligations will apply to federal government contracts if (a) the wages of employees “performing on or in connection with” the contract are governed by the Davis-Bacon Act of 1931 (DBA), the McNamara-O'Hara Service Contract Act (SCA), or the Fair Labor Standards Act (FLSA), including employees who qualify for an exemption from the FLSA’s minimum wage and overtime provisions, and (b) the contract falls into one of the following four categories:
- a procurement contract for construction covered by the DBA;
- a contract for services covered by the SCA;
- a contract for concessions, including any concessions contract excluded from coverage under the SCA by Department of Labor regulations at 29 CFR 4.1333(b); or
- a contract in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.
As for the definition section, the proposal borrows the definition of many terms that are included in the regulation implementing Executive Order 13658, Establishing a Minimum Wage for Contractors as well as Executive Order 13495, Nondisplacement of Qualified Workers Under Service Contracts. Thus, definitions of several key terms are based on regulations implementing these other executive orders. Without delving into the minutiae of the NPRM’s lengthy section of definitions, there are a few definitions worth highlighting at this juncture.
- Paid sick leave can be used to care for a broader group of people than the individuals for whom Family and Medical Leave Act (FMLA) leave can be taken. Notably, leave to care for a child is allowed without regard to the age of the child and therefore can apply to care for adult children as well as minors.
- The concept of domestic partnership is broadly defined to include “a committed relationship with another adult.”
- “Family relationship” is defined as a relationship with any person with whom an employee has a significant personal bond—regardless of biological or legal relationships—including a cousin, close friend, or fiancé.
- “Physical or mental illness, injury, or medical condition” encompasses any illness, injury, or medical condition, regardless of whether it requires attention from a health care provider or whether it would be a “serious health condition” under the FMLA. Examples cited by the DOL include a common cold, ear infection, upset stomach, ulcer, flu, headache, migraine, sprained ankle, broken arm, or depressive episode.
The NPRM also establishes an administrative procedure to address compliance failures and makes clear that it does not create a private right of action.
The NPRM includes as Appendix A the contract clause to be included in applicable solicitations and government contracts. The NPRM states that it will apply to future contracts or solicitations issued on or after January 1, 2017, assuming that DOL issues its final regulations by September 30, 2016, and the Federal Acquisition Regulatory Council issues its required regulations within 60 days of the final DOL rule.
The full text of the NPRM, along with a fact sheet and further information on the proposal, can be found on the DOL’s website. We will provide in depth coverage of the paid sick leave NPRM once it is published in the Federal Register.