To follow up on our report last month, President Obama has signed an Executive Order requiring federal contractors to give their workers the ability to earn up to seven days (56 hours) of paid sick leave each year.  The executive order will go into effect on January 1, 2017 and instructs the U.S. Secretary of Labor to issue regulations to implement the executive order by September 30, 2016.

The Order will apply to employees whose wages are governed by the Davis-Bacon Act, the Service Contract Act or the Fair Labor Standards Act, including those that qualify for minimum wage and overtime exemptions under the FLSA.

For these covered employees, the Order will apply to new contracts or contract-like instruments, as defined by the Secretary of Labor in the regulations, if the contract is:

  1. a procurement contract for services or construction;
  2. a contract or contract-like instrument for services covered by the Service Contract Act;
  3. a contract  or contract-like instrument for concessions, including any concessions contract excluded by Department of Labor regulations;
  4. a contract or contract-like instrument entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.

Other details of the Order include:

  • An hour of paid leave is earned for every 30 hours of work
  • Leave can be used care for the worker or family members;
  • Unused leave can carry over from year to year;
  • Unused leave will be reinstated for employees rehired by a covered contractor within 12 months after a job separation;
  • Payment for unused leave upon job separation is not required

The Order also explicitly states “it does not supersede other federal, state, or local laws or collective bargaining agreements that provide greater benefits.”

Stay tuned for updates on proposed regulations and what will sure to be other developments in this area.