On Labor Day, President Obama signed a new executive order (EO) that will require covered government contractors and subcontractors to provide, as a condition of payment on the contract, paid leave to employees who are sick, seeking medical attention, or need to care for a sick relative.  The new rule, when adopted and implemented by the US Department of Labor (DOL), would take effect January 1, 2017, and require all eligible employees performing services under a covered government contract to “earn not less than 1 hour of paid sick leave for every 30 hours worked[,]” with an allowable cap at 56 hours (about seven working days) per year.  Paid sick leave accrued under the EO would be carried over year to year, and may be used for an absence resulting from:

  • A physical or mental illness, injury, or medical condition;
  • Obtaining diagnosis, care or preventive care from a health care provider;
  • Caring for a child, parent, spouse, domestic partner, “or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship;” or
  • Domestic violence, sexual assault, or stalking, so long as the leave is used to seek medical attention, obtain counseling, seek relocation assistance from victim service organizations, or prepare civil or criminal proceedings.

Other unique aspects of the new EO include:

  • A covered contractor or subcontractor must provide paid sick leave upon either the oral or written request of an employee, which must include the expected duration of the leave and should be made at least seven calendar days in advance of the leave, so long as the requested leave is foreseeable.  In other cases, the EO requires employees seeking to use paid sick leave to provide their employer with notice “as soon as is practicable.”  Notably, the EO states that covered contractors cannot require an employee to provide a certification from a health care provider unless the employee takes three or more days of sick leave.  And a covered contractor cannot require an employee seeking to use paid sick leave to find a replacement to cover any work time the employee will miss.
  • A covered contractor cannot in any way discriminate against an employee for taking, or attempting to take, paid sick leave.
  • Paid sick leave accrued under the EO would be reinstated in the event an employee is rehired by a covered contractor within 12 months after a job separation.  However, the EO does not require a covered contractor to make a financial payment to an employee upon separation for any accrued sick leave that the employee did not use.
  • Paid sick leave accrued under the EO would be in addition to a covered contractor’s obligations under the Service Contract Act and the Davis-Bacon Act.

Although the EO does not create any new rights, the president has instructed the DOL to issue implementing regulations carrying out the EO by September 30, 2016, which will include a lengthy public comment period.  Covered contractors and subcontractors would therefore be wise to begin an audit of their current practices to anticipate an effective date of January 2, 2017.   The Dentons Employment and Labor group has been following this EO closely and is available to assist covered contractors with submitting comments to the DOL and in assessing the new compliance obligations.