DOL Issues Proposed Regulations Regarding Paid Sick Leave for Federal Contract Workers

by Amelia J. Holstrom

Last September, President Obama signed an executive order granting federal contract workers the right to earn and use up to 56 hours of paid sick leave per year for the employee’s own illness, the illness of a family member, or for reasons related to domestic violence, sexual assault or stalking.  Such leave must be earned at the rate of at least one hour for every thirty hours worked.  As outlined in an earlier blog post, the Secretary of Labor was expected to issue regulations regarding the paid sick leave by September 2016.  On February 25, 2016, the Secretary of Labor issued a proposed rule implementing the executive order.  The proposed rule answers some of the questions that were not addressed in the executive order.

Covered Workers

Although the executive order stated that it applied to federal contractors, it was not clear whether it applied to all federal contractors, or whether it would apply only to federal contractors that met certain requirements.  The proposed rule clarifies that issue and states that the obligation to provide paid sick leave will apply to employers who enter new contracts covered by the Davis-Bacon Act, Service Contract Act, concessions contracts, or service contracts in connection with federal property on or after January 1, 2017.

Carry-over

The executive order provided that employees must be permitted to carry over accrued, unused paid sick leave from one year to the next.   It did not, however, specify how much unused time could be carried over each year.  Under the proposed rule, an employee may carry over up to 56 hours of accrued but unused sick leave from one year to the next.  Paid sick leave carried over from the previous year cannot count toward any limit, which cannot be less than 56 hours, that the contractor sets for annual accrual of paid sick leave.  For example, if the employee carries over 16 hours from one year to the next, he is still entitled to accrue 56 hours in the new year subject to the limitations described below.  However, similar to the Massachusetts Earned Sick Time law, the employer can delay the accrual of additional paid sick leave in the new year until the employee draws the paid sick leave bank down below 56 hours.  In other words, if an employee carries over 56 hours of paid sick leave from one year to the next, the employer may delay further accrual until the employee uses a portion of that available paid sick leave.  Once the bank is drawn below 56 hours, the employee is entitled to begin accruing again up to the yearly accrual amount set by the employer (a minimum of 56 hours).

Smallest Increment of Use

The proposed rule directly addresses the smallest increment of time that an employee may take paid sick leave.  Employees may use as little as one hour of paid sick leave.

Existing Policies

The proposed regulations also make clear that existing policies can fulfill the employer’s paid sick leave obligations as long as the policy provides the employees the same rights and benefits as the rule requires.

If implemented, the proposed rule will provide access to paid sick leave to over 828,000 employees, more than half of which do not currently received paid sick leave.  The DOL is seeking public comment on the proposed rule and will use those comments in shaping its final rule, which is expected to be issued this fall.  Comments on the proposed rule may be submitted through the Federal eRulemaking Portal at http://www.regulations.gov, or by mail addressed to Robert Waterman, Compliance Specialist, Division of Regulations, Legislation and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3510, 200 Constitution Avenue NW, Washington, DC 20210.  The deadline for submissions is April 12, 2016.

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2 Responses to DOL Issues Proposed Regulations Regarding Paid Sick Leave for Federal Contract Workers

  1. How will this affect contractors who do “some” Davis Bacon Federal work but not all of their work falls under this category?

  2. Under the proposed rule, employees who are directly engaged in performing the specific work called for by the contract at any point during the workweek shall be entitled to accrue paid sick leave regardless of how much time they spend on federal contract work. Employees who perform work duties necessary to the performance of the contract, but who are not directly engaged in performing the specific work called for by the contract, would only have to accrue paid sick leave if they spend at least 20% of their hours in a particular workweek performing federal contract-related work. Although not entirely clear, this wording suggests that accrual could vary from week to week. In other words, an employee would have to accrue sick leave during weeks in which the employee spends at least 20% of their work hours on federal contract-related work and would not have to accrue during weeks in which the employee spends less than 20% of their work hours on contract-related work. I noticed this issue was raised by another employer in the public comments for the rule; you may want to submit a comment on this issue as well, since the more concern there is about a particular piece of the proposed rule, the more likely the DOL is to make changes when the final rule is issued.

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