President Obama continues to mandate expansion of protections and benefits for employees of federal government contractors and subcontractors.
In 2014, President Obama signed Executive Order (“EO”) 13672 to prohibit federal contractors and subcontractors from discriminating on the basis of sexual orientation or gender identity, and directed the Secretary of the Department of Labor (“DOL”) to prepare regulations implementing the new protections. Pursuant to EO 13658, President Obama called for an increase in the minimum wage to $10.10/hour for employees of federal government contractors and subcontractors, which went into effect in January 2015. In 2014, President Obama directed the Secretary of the DOL to “propose revisions to modernize and streamline the existing overtime regulations.” The DOL responded this summer by proposing a rule which would raise the minimum salary threshold under the Fair Labor Standards Act to make an estimated five million more Americans eligible for overtime pay.
Most recently, on Labor Day 2015, President Obama announced a new EO mandating that federal government contractors and subcontractors are to provide paid leave to their full-time and part-time employees. It is anticipated that this benefit will affect more than 300,000 workers who currently are without such benefits. Specifically, the EO mandates that all employees are to earn one hour of paid sick leave for every 30 hours worked. This mirrors the accrual rate recently implemented for California and Massachusetts employees, but unlike California and Massachusetts which only provide for a minimum of three days and five days, respectively, the President’s EO requires a minimum of seven days (56 hours). Additionally, the EO provides that the leave can be used for the physical or mental illnesses, injuries or medical conditions of the employee, and their children, parents, spouses, domestic partners and “any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”
This new mandate presents a number of issues for federal government contractors and subcontractors. In addition to the possible concerns regarding anticipated costs of such benefits and expansion of coverage to include those not in the employee’s immediate family, if an employer does not already provide these benefits, the EO provides that an employee give only limited amount of notice to an employer of need for foreseeable leave. For example, unlike under the Family Medical Leave Act (“FMLA”) where employees can be required to provide 30 days advanced notice of the need to take leave, the EO only requires notice of seven calendar days. Moreover, employers are only allowed to seek certification of the leave if an individual is absent for three or more consecutive days.
The EO directs the Secretary of Labor to issue regulations by September 30, 2016 with the expectation that a final rule can be implemented in the final quarter of 2016 to apply to any and all federal contracts entered into on or after January 1, 2017.