President Obama signed a new Executive Order on September 7, 2015 that will require certain federal contractors to provide employees up to 56 hours of paid sick leave per year.  The leave can be used for the employee’s care or if the employee needs to take care of a family member.  The new obligations are not scheduled to take effect until January 1, 2017.

Regulations to Come

The executive order requires the Department of Labor to issue regulations by the fall of 2016.  These regulations will shed more light on the specifics of the new obligations and related recordkeeping requirements.  At this time, we know the following:

  • Similar to the new federal contractor minimum wage requirements that became effective earlier this year, Executive Order 13706 applies only to certain type of federal contracts, including procurement contracts for services or construction, contracts for services covered by the federal Service Contract Act, contracts for concessions and certain contracts entered into with the federal government in connection with federal property or lands.
  • A contractor’s existing paid leave policy may already be sufficient if it provides at least as much paid sick leave and for the same reasons and under the same conditions as prescribed in the executive order.
  • Employees would earn 1 hour of paid sick leave for every 30 hours worked on or in connection with an applicable federal contract.
  • Employees must provide notice of the need for leave at least seven days in advance if foreseeable and as soon as practicable if not foreseeable.
  • Certification of the need for leave may be requested only if the leave is at least three consecutive days.
  • Leave needed to care for family members may be used for spouses, domestic partners, children, parents or “any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”
  • Leave may be taken for absences resulting from domestic violence, sexual assault or stalking.
  • Discrimination or retaliation against employees who use the leave will be prohibited.
  • Unused leave amounts may be carried over from year to year.
  • Unused leave need not be paid out upon termination but must be reinstated for any employee who is rehired by the contractor within 12 months after a job separation.
  • Executive Order 13706 does not replace other federal, state or local laws or collective bargaining agreements that may provide greater benefits.

Although these new requirements do not become effective for more than a year, prudent contractors may want to begin considering how they will comply.  Key questions to consider are:  (1) whether the contractor has or plans to pursue any of the types of federal contracts that are covered by Executive Order 13706; (2) whether the contractor’s existing paid sick leave policies, if applicable, can or should be modified to conform with the specific obligations of Executive Order 13706; and (3) whether the contractor’s current HRIS and related software systems will be able to effectively track employee accrual and use of paid sick leave under Executive Order 13706.