Executive order

On September 7 (Labour 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 their employees:

  • the accrual of one hour's paid sick leave for every 30 hours worked;
  • annual accrual limits of no less than 56 hours a year (ie, the equivalent of seven eight-hour workdays);
  • carry over of paid sick leave from one year to the next (although no pay-out of accrued sick leave is required on an employee's separation); and
  • reinstatement of accrued sick leave for employees rehired by the covered contractor within 12 months of separation.

Although the order is effective immediately, in practical terms contractors vying for federal contracts will have until January 1 2017 to begin providing such benefits.

In addition to specifying the level of benefits to be provided, the executive order sets forth the circumstances under which contractors' employees may use the paid sick leave. Specifically, employees may take leave for purposes of:

  • recovering from physical or mental illness, injury or a medical condition;
  • obtaining diagnosis, care or preventative care from a healthcare provider; and
  • seeking counselling, relocation or other victims' services or legal assistance relating to domestic violence, sexual assault or stalking.

Further, 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.

Comment

Employers with paid sick leave policies that already provide benefits that are equal to or greater than those set out in the executive order need not provide additional benefits to their employees. However, employers should carefully consider whether their policies provide the same benefits as are required under the order – particularly in light of regulations that the president has directed the Department of Labour to issue next year implementing the order.

Finally, covered federal contractors should pay attention to the order's ban on employer interference or discrimination on the basis of an employee's taking or attempting to take mandated paid sick leave. The order also empowers the Department of Labour to investigate potential violations of both the order and the forthcoming implementing regulations.

For further information on this topic please contact Geoffrey D DeBoskey at Sidley Austin LLP's Los Angeles office by telephone (+1 213 896 6000) or email (gdeboskey@sidley.com). Alternatively, please contact Theresa L Reuter at Sidley Austin LLP's Chicago office by telephone (+1 312 853 7000) or email (treuter@sidley.com). The Sidley website can be accessed at www.sidley.com.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.