DOL publishes final rule on federal contractor paid sick leave requirements

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Jordann Donskey is a senior marketer at EPAY Systems is a leading SaaS provider of seamless human capital management technology and services designed to help medium to large businesses manage their workforce in a lot less time and with a lot less work.

The Department of Labor (DOL) has issued its final rule implementing Executive Order 13706, which mandates certain federal contractors and subcontractors to offer paid sick leave to their employees. It is expected to affect more than 1.1 million workers.

Recently, more than 20 states and cities have passed paid sick leave legislation. Some employers are worried that the final rule will have a domino effect on the private sector due to federal contractors offering the same paid sick leave to their non-federal contract employees to have consistent policies.

The final rule made several changes to reflect comments and to provide clarifications from the review period of the proposed rule. Despite its attempts to fix shortcomings of the proposed rule, the final rule still includes some parts that may create complicated compliance challenges for employers.

Listed below are seven key highlights from the final rule on paid sick leave and the DOL Fact Sheet on Executive Order 13706.

1. Covered contracts
The final rule pertains to contracts solicited by the federal government on or after Jan. 1, 2017. It further applies to contracts entered into prior to Jan. 1, 2017 if, through bilateral negotiation, on or after Jan. 1, 2017, the contract is renewed or is extended or amended under certain circumstances.

2 .Paid Sick Leave
The final rule mandates employees receive one hour of paid leave for every 30 hours worked, allowing up to a maximum of 56 hours of paid sick leave per year. Accrual of paid sick leave is required to be calculated and reported to employees. Paid sick leave is required to be able to carry over from one accrual year to the next. Paid sick leave must be reinstated for employees rehired by the same contractor within 12 months after a job separation.

3. Use of paid sick leave
Paid sick leave may be used for:
· a physical or mental illness, injury or medical condition
· when obtaining diagnosis, care or preventive care from a healthcare provider
· when caring for a child, parent, spouse, domestic partner, who has need for diagnosis, care, or preventive care
· for domestic violence, sexual assault or stalking situations

4. Prohibited acts
The final rule forbids contractors from:
· discriminating against employees for using or attempting to use paid leave
· interfering with employee rights under the final rule
· preventing employees from filing any complaints or cooperating in any investigation regarding compliance with the final rule
· preventing employees from informing any other person of their rights under the final rule
· waiving any rights under the final rule

5. Recordkeeping and Notices
The Final rule has complex recordkeeping requirements for federal contractors. These include:
· copies of notifications to employees of the amount of paid sick leave accrued
· denials of employees’ request to use paid sick leave
· dates and amounts of paid sick leave employees use
· other records showing the tracking of employees’ accrual and use of paid sick leave
· Contractors will have to keep employees’ medical and other records, especially those relating to domestic violence, sexual assault, and stalking, separate from other records and confidential.

Emerging paid sick leave legislation does not bode well for employers. In fact, several major cities have recently passed paid sick leave ordinances with many more cities expected to follow suit. The final rule on government contractor sick leave is a portion of a grander effort to implement paid sick leave across the board. President Barack Obama’s 2016 budget contains greater than $2 billion in new funds to embolden states to develop paid family and medical leave programs.

Contractors ought to review their current sick leave and PTO policies to ensure compliance with the final rule. They should update their PTO policies to provide at least 1 hour of leave for every 30 hours worked and no less than 56 hours per year. Contractors must also be cognizant of any state and local statutes or ordinates that require paid sick leave for their employees.

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