Government Contracts Monitor

Short Take: New Rule on Paid Sick Leave for Federal Contractors

June 13, 2016

The Seminannual Agenda of Regulations issued by the Department of Labor (DoL) describes the DoL’s plans for implementing the terms of Executive Order (EO) 13706, Establishing Paid Sick Leave for Federal Contractors, which the President issued on September 7, 2015. According to the Agenda, the DoL’s final rule should be issued in September, and will require executive departments and agencies to ensure that new contracts include a clause stating that contract and subcontract employees shall earn at least one hour of paid sick leave for every 30 hours worked. The clause will flow down to all lower-tier subcontracts.

EO 13706 also mandates when an employer can limit its employees accrual of sick leave, and instructs contractors that employees must be allowed to carry over earned sick leave to the next calendar year. In some cases, if an employee is rehired by a contractor, the sick leave must be reinstated. The EO also describes the purposes for which this sick leave can be used, and when a contractor may require proof to substantiate an employee’s claimed illness.

The EO supplements, and does not replace or supersede, a contractor’s requirements under the Service Contract Act and the Davis Bacon Act, as applicable. Pending action by the FAR Council, EO 13706 will apply to contracts resulting from solicitations issued on or after January 1, 2017.