On February 25, 2016, the Department of Labor proposed regulations requiring many government contractors to provide up to seven days of paid sick leave to employees. The proposal seeks to implement Executive Order 13706, which was issued by President Obama on Labor Day last year. DOL estimates that the new regulations will provide paid sick leave to nearly 437,000 government contractor employees who had none before.

Here is a look at DOL’s proposal—

The basics

Application:  Government contractors and subcontractors working under covered contracts.

Covered Contracts:  (1) Davis-Bacon Act contracts; (2) Service Contract Act contracts; (3) concessions contracts; and (4) contracts offering services under leases and licenses associated with Federal property.

Affected Employees:  Employees performing work on covered contracts whose wages are governed by the DBA, SCA, or FLSA, as well as exempt employees.

Absences Covered:  Those absences resulting from:

  • Their own illnesses or other physical or mental health care needs, including preventive care.
  • The care of a family member or loved one who is ill or needs healthcare, including preventive care.
  • Purposes resulting from being the victim of domestic violence, sexual assault or stalking, or to assist a family member or loved one who is such a victim.

No Credit:  Paid sick leave under the proposed regulations would not count towards meeting prevailing wage or fringe benefit obligations under the DBA or SCA.

Enforcement:  Complaints of non-compliance would be filed with the DOL’s Wage and Hour Division. There is an investigatory process and an administrative process for resolving disputed questions of fact and law. Contractors found to have violated the regulations may be subject to the withholding of funds, damages, and debarment.

Effective Date:  New or replacement contracts solicited by or otherwise awarded on or after January 1, 2017.

The details

DOL’s proposal closely tracks Executive Order 13706. It provides the details on how employees will accrue sick leave and how they would request and use sick leave. It also addresses how employers would verify eligibility for sick leave and how the new sick leave rules interact with other laws and paid time off policies.

The proposed regulations would add to the FMLA/ADA (and sometimes workers’ compensation) quagmire that is the world of sick leave for government contractors. If a government contractor does not already have a leave policy, it will need one. If it already has one, it will need to modify it to comply with the new requirements. Some of the major modifications from a typical sick leave or PTO policy would include:

  • Accrual of sick leave (e.g., 1 hour for every 30 hours worked)
  • Carry-over of unused sick leave from year to year
  • Reinstatement of unused sick leave if a departed employee is rehired within a year
  • Allowing sick leave to be taken in increments as short as 1 hour
  • Granting sick leave for absences related to domestic violence, sexual assault, and stalking
  • Expanding sick leave to care for any person related by blood or affinity whose close association with the employee is the equivalent of a family relationship (g., a former foster sibling or elderly neighbor who is treated like a grandparent)
  • Reporting monthly to employees the amount of their sick leave used
  • Defining the information to be included in a request for sick leave
  • Limiting the contractor’s ability to ask questions and seek certification of an illness

Comments on DOL’s proposed paid sick leave regulations are due by March 28, 2016. Hopefully, the comments will persuade the DOL to reign in some of the excesses in the final rule, which is to be issued by September 30, 2016. However, Executive Order 13706 does not leave the DOL much wiggle room.