By Executive Order (“EO”) issued September 7, 2015, federal contractors shall provide their employees, and require their subcontractors to provide to its employees performing under the contract, at least 1 hour of paid sick leave for every 30 hours worked.  Contractors may not cap the accrual of sick leave at less than 56 hours, and accrual must be carried over from one year to the next.  Additionally, although this paid sick leave is not required to be cashed out upon termination of employment, employees rejoining the contractor within 12 months after termination of employment must have any accrued but untaken paid sick leave reinstated and available for their use. Subject to the final regulations to be issued, this rule becomes effective for contracts entered into after January 1, 2017.  

How will this affect you?  Many federal contractors already offer paid sick leave, although some do so through Paid Time Off (“PTO”) banks which combine vacation and sick leave into a single leave bank. A contractor’s existing plan may comply with the new rule if the paid leave is available to all covered employees, in a sufficient amount of leave to meet the EO’s 1 hour accrued for every 30 hours worked, and leave is permitted for the same purposes and under the same conditions as provided in the EO.

Because the EO’s approved sick leave uses are detailed and specific, contractors should compare their existing leave policies and amend as appropriate. For example, the EO permits paid sick leave to be used for the employee’s own physical or mental illness, injury or condition and diagnosis, care or preventive care from a health care provider as well as an absence to address these same needs for a child, parent, spouse, domestic partner, or any other individual related by blood or an association similar to a family relationship. These permissible uses are somewhat broader than those provided under the Family Medical Leave Act. Further, the EO provides that approved sick leave includes leave for domestic violence, sexual assault, or stalking if these issues result in a need for care as described above for treatment or preventative care. Covered employees may use accrued paid leave to obtain counseling, seek relocation, seek assistance from a victim services organization, take related legal action including preparing for related civil or criminal proceedings or assist an individual related to the employee in doing so. Few existing federal contractor paid leave policies are as specific or expansive as now required.

The policy in action.  Employees using this paid sick leave may give oral or written notice including the expected duration of the leave. If the leave is foreseeable, employees are to give employers at least 7 days’ notice, but in other cases as soon as practicable. Employers cannot condition the employee’s right to take leave on finding a replacement to cover work to be missed. Employers may require a health care provider’s certification for leave lasting 3 or more consecutive days under certain circumstances. The paid sick leave is in addition to any federal contractor’s obligation to provide paid leave as a benefit obligation under the Service Contract Act or Davis-Bacon Act.