the situation
Your company does jobs for the federal government. You don’t
currently provide employees with sick leave. Will you be required to
change this practice?
the ruling
As most employers are aware, in September 2015, President Obama
signed Executive Order 13706 which addressed paid sick leave for federal
contractors. Basically, the Executive Order requires certain government
contractors to provide employees with up to seven days of paid sick
leave on an annual basis, including for family care and absences
resulting from domestic violence, sexual assault, and stalking. The
Department of Labor (“DOL”) was required to issue regulations
implementing the Executive Order by September 30, 2016. Last week, the
DOL published a Notice of Proposed Rulemaking—outlining the proposed
terms of its regulations effectuating President Obama’s order related to
paid sick leave.
Under the proposed rule, there would be four categories of government
contracts that would trigger these paid sick leave
obligations—procurement contracts for construction covered by the
Davis-Bacon Act, service contracts covered by the McNamara-O’Hara
Service Contract Act, concessions of contracts (including those excluded
from the McNamara-O’Hara Service Contract Act by the DOL’s
regulations), and contracts in connection with federal property or lands
and related to offering services for federal employees, their
dependents or the general public.
The proposed rule would apply to any person working in connection
with a contract covered by the Executive Order whose wages are governed
by the McNamara-O’Hare Service Contract Act, the Davis-Bacon Act, or the
Fair Labor Standards Act (including those who qualify for an exemption
under the FLSA). There is a small exception for employees who perform
duties necessary to the contract but not directly engaged in performing
the specific work called for by the contract and who spend less than 20%
of their time performing work related to this type off contract.
Under the proposed rule, employees of the covered government
contractors would have to accrue not less than one hour of paid sick
leave for each thirty hours worked—or these employers can give employees
at least 56 hours of paid sick leave at the beginning of each accrual
year. The proposed rule suggests giving employers the opportunity to
limit the amount of sick leave that can accrue to 56 hours-but the
employees have to be able to carry it over from one year to the next.
Also, if an employee leaves and then is rehired, the employer has to
reinstate that employee’s accrued sick leave. Employers won’t be
required to pay employees for accrued sick leave at the time of a job
separation.
The proposed rule also provides clarification regarding the uses of
paid sick leave and the required documentation related to it and an
avenue of complaint to the Wage and Hour Division of the DOL.
the point
This proposed rule has a fairly wide reach
as far as government contractors. Even though this rule has not yet been
finalized (and is still subject to comment), government contractors
that do not currently offer their employees paid sick leave are well
advised to begin considering the impact of this type of regulation or
rule on their respective businesses.