On September 7, 2015, President Obama issued an Executive Order(EO) that requires federal government contractors to provide employees with paid “sick leave.” Under the EO, employees working under covered federal contracts and subcontracts will earn one hour of paid sick leave for every 30 hours worked. The U.S. Department of Labor and the Federal Acquisition Regulatory (FAR) Council will be responsible for developing the regulations implementing the EO. The new paid leave rules will take effect after regulations are issued and only with respect to new contracts solicited or entered into after January 1, 2017.
The new EO broadens the group of employees eligible for paid sick leave and expands the purposes for which leave may be used beyond what is contained in many contractor leave policies. The EO is an example of the president using his executive authority to require government contractors to implement pro-employee policies he has not been able to implement through legislation that would apply to all types of employers. A summary of the key provisions of the EO are:

  • Sick leave must be earned by employees working “in performance of the contract or any subcontract thereunder."
  • Employees accrue a minimum of one hour of paid sick leave for every 30 hours worked.
  • Although employers may cap the total amount of leave that may be accrued per year, this cap cannot be less than 56 hours per year.
  • Paid sick leave may be used for personal or family health issues (including for physical and mental health conditions and preventative care) or to deal with issues relating to domestic violence, sexual assault, or stalking of the employee or a family member (including for counseling, relocation, and participation in legal proceedings).
  • Paid leave carries over from year to year; it need not be paid on termination, but must be reinstated upon rehire within 12 months after separation.
  • Seven days’ advance oral or written notice is required for a foreseeable need for leave, or as soon as practicable for an unforeseeable need for leave.
  • Medical or other documentation of paid leave may be required for absences of three consecutive days or more.
  • The EO prohibits contractors from interfering with or discriminating against an employee for taking or attempting to take paid sick leave. 
  • A contractor’s generally applicable paid leave policy may be used if the amount of paid leave “is sufficient to meet the requirements” of the EO and the leave “may be used for the same purposes and under the same conditions” described in the EO.
  • The EO does not excuse employers from compliance with state or local paid sick leave rules or applicable collective bargaining agreements that provide greater rights than the EO.

Government contractors should watch for new regulations from the Secretary of Labor and the FAR Council in 2016, which will provide additional details of the paid sick leave obligations and any exclusions. Employers generally should keep up with the many new state or local paid sick leave requirements that may also apply.