March 8, 2016

Paid Sick Leave Requirements for Federal Contractors

On February 25, 2016, a Notice of Proposed Rulemaking (NPRM) was published in light of President Obama’s Executive Order 13706.  The Executive Order, which was signed on September 7, 2015, requires organizations that enter into covered federal contracts to provide covered employees with up to 7 days of paid sick leave annually.  The proposed rule was published by the Department of Labor’s Wage and Hour Division, and describes categories of contracts and employees covered by the Executive Order in more detail.  Further, the NPRM outlines the rules for how sick leave will accrue, when it can be used, and how the Department of Labor will ensure compliance.

The Department of Labor’s fact sheet estimates that the proposed set of rules will provide paid sick leave to nearly 437,000 workers employed by federal contractors who currently receive no paid sick leave.  Under the proposal, EO 13706 applies to 4 major types of contractual agreements:

    1. procurement contracts for construction covered by the Davis-Bacon Act (DBA);
    2. service contracts covered by the McNamara-O’Hara Service Contract Act (SCA);
    3. concessions contracts, including any concessions contracts excluded from the SCA by the Department’s regulations at 29 CFR 4.133(b); and
    4. contracts in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.

The NPRM invites individuals or organizations to submit written comments by April 12, 2016 (a recent extension was granted), which would be used to help form the final rule.

By Joanna Colosimo, Senior Consultant at DCI Consulting Group 

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