President Obama Issues Executive Order Establishing Paid Sick Leave for Federal Contractors

On Labor Day, September 7, 2015, President Barack Obama signed an Executive Order–Establishing Paid Sick Leave for Federal Contractors–requiring covered federal contractors and subcontractors to offer their employees up to seven days of paid sick leave per year.

According to a White House press release, the Executive Order will offer approximately 300,000 people working on federal contracts with the ability to earn up to seven days of paid sick leave each year. For all covered contracts, solicited or awarded, on or after January 1, 2017, workers will earn a minimum of one hour of paid sick leave for every 30 hours worked (although contractors will be free to offer more generous amounts at their discretion). Contractors may not set a limit on the total accrual of paid sick leave per year, or at any point in time, at less than 56 hours. The Order allows workers to use paid sick leave to care for themselves, a family member, such as a child, parent, spouse, or domestic partner, or another loved one, as well as for absences resulting from domestic violence, sexual assault, or stalking.

Notice & Certification

Pursuant to the Order, paid leave must be provided upon the oral or written request of an employee that includes the expected duration of the leave, and is made at least seven calendar days in advance where the need for the leave is foreseeable, and in other cases, as soon as is practicable. A contractor may only require certification issued by a health care provider for paid sick leave for employee absences related to physical or mental illness, injury, or medical care for themselves or family members, of three or more consecutive workdays, with the certification to be provided no later than 30 days from the first day of the leave. However, if three or more consecutive days of paid sick leave is used for the purposes related to domestic violence, sexual assault, or stalking, documentation may be required to be provided from an appropriate individual or organization with the minimum necessary information establishing a need for the employee to be absent from work. The contractor shall not disclose any verification information and shall maintain confidentiality about the domestic violence, sexual assault, or stalking, unless the employee consents or when disclosure is required by law.

Additional Provisions

The Order additionally provides that paid sick leave, among other things:

• Carry over from one year to the next and be reinstated for employees rehired by a covered contractor within 12 months after a job separation.
• Is in addition to a contractor’s obligations under the Service Contract Act and Davis-Bacon Act, and that contractors may not receive credit toward their prevailing wage or fringe benefit obligations under those Acts for any paid sick leave provided in satisfaction of the requirements of this order; and
• May be satisfied where a contractor’s existing paid sick leave policies (provided in addition to the fulfillment of Service Contract Act or Davis-Bacon Act obligations, if applicable) if the amount of such paid leave is made available to all covered employees and may be used for the same purposes and under the same conditions.

The Order does not require a covered contractor to make a financial payment to an employee upon a separation from employment for accrued sick leave that has not been used, but unused leave is subject to reinstatement upon a rehiring of the employee. Additionally, under the Order, covered contractors may not interfere with, or in any other manner discriminate against an employee for: (i) taking, or attempting to take, paid sick leave as provided for under the Order, or (ii) in any manner asserting, or assisting any other employee in asserting, any right or claim related to this order. The Order does not excuse noncompliance with, or supersede any applicable federal, state, or local law, or a collective bargaining agreement requiring greater paid sick leave or leave rights than those provided for under the Order.

Finally, the Order directs the Secretary of Labor to issue necessary and appropriate implementing regulations by September 30, 2016, including:
(i) providing necessary exclusions from the requirements set in the Order; (ii) defining terms used; and (iii) requiring contractors to make, keep, and preserve such employee records as the Secretary deems necessary and appropriate for the enforcement of the Order or the regulations thereunder.

The guaranteed provision of paid sick leave is likely to spread beyond federal employees and federal contractors. In the White House press release, the President calls for Congress to pass federal legislation providing leave to millions more workers by passing the Healthy Families Act, which would require all businesses with 15 or more employees to offer up to seven paid sick days each year. Additionally, the release restates the President’s calls for states and cities to pass similar state and local legislation expanding paid leave.