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DOL publishes proposed rules for paid sick leave for federal contractors

March 3, 2016

By Anthony Kaylin, courtesy of SBAM Approved Partner ASE

As of February 12, 2016, there are at least 25 state and local jurisdictions that mandate paid sick leave.  Now it is the federal government’s turn.  On February 25, 2016, the Department of Labor published its Notice of Proposed Rulemaking (NPRM) for the proposed regulations for paid sick leave for federal contractors.  It’s 285 pages in length, and comments to the proposed regulations must be submitted by March 28, 2016, 30 days after publication.

These proposed regulations are the follow-up to Executive Order 13706, which President Obama signed on September 7, 2015 requiring paid sick leave for the employees of federal contractors and subcontractors when the work on new federal contracts after 1/1/17. 

In general,  the Executive Order provides for up to seven days of paid sick leave annually and requires that employees shall earn 1 hour of paid sick leave for every 30 hours worked for a total of no less than 56 hours of paid sick leave per year.  These hours are rolled over year to year, but not payable when an employee terminates the employer.  These hours are also reinstated when rehiring an employee who terminated within the past 12 months.  Additionally, the executive order stipulated that such paid sick leave could be taken for an absence (i) due to a physical or mental illness, injury or medical condition; (ii) to obtain care, diagnosis or preventative care from a health care provider; (iii) to care for a child, domestic partner, parent, spouse or other individual related by blood or affinity which is equivalent to a family relationship; or (iv) to obtain counseling, seek relocation, obtain other assistance from victim services, or take legal action for domestic violence, sexual assault, or stalking.

The NPRM would cover all employees except those who spend less than 20 percent of their hours worked in a particular workweek performing in connection with such contracts. An employee works “in connection with” a covered contract if she performs work duties necessary to the performance of the contract.

These regulations will apply to federal government contracts if (a) the wages of employees “performing on or in connection with” the contract are governed by the Davis-Bacon Act of 1931 (DBA), the McNamara-O’Hara Service Contract Act (SCA), or the Fair Labor Standards Act (FLSA), including employees who qualify for an exemption from the FLSA’s minimum wage and overtime provisions, and (b) the contract falls into one of the following four categories: 

  1. A procurement contract for construction covered by the DBA;
  2. A contract for services covered by the SCA;
  3. A contract for concessions, including any concessions contract excluded from coverage under the SCA by Department of Labor regulations at 29 CFR 4.1333(b); or
  4. A contract in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

Paid sick leave can be used to care for a broader group of people than the individuals for whom Family and Medical Leave Act (FMLA) leave can be taken. Notably, leave to care for a child is allowed without regard to the age of the child and therefore can apply to care for adult children as well as minors.  The concept of domestic partnership is broadly defined to include “a committed relationship with another adult.”  And “Family relationship” is defined as a relationship with any person  whom an employee has a significant personal bond—regardless of biological or legal relationships—including a cousin, close friend, or fiancé.

Its provision could be used for “Physical or mental illness, injury, or medical condition” encompasses any illness, injury, or medical condition, regardless of whether it requires attention from a health care provider or whether it would be a “serious health condition” under the FMLA.  But it also  could be used for a common cold, ear infection, upset stomach, ulcer, flu, headache, migraine, sprained ankle, broken arm, or depressive episode.

A contractor’s existing paid time off (PTO) policy will satisfy the requirements of the Executive Order and the proposed regulations if the paid time off policy includes all that the EO and proposed regulations incorporate.

Further, contractors are required to add specific language to contracts and, more importantly, to ensure compliance by subcontractors. 

Although good intent, these regulations could be an administrative nightmare for most employers.  To see comprehensive highlights of the NPRM, click here.

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