The Department of Labor (DOL) announced last Thursday that it has posted for comment its Proposed Rule implementing President Obama’s September 7, 2015 Executive Order (EO 13706), which requires certain federal contractors and their subcontractors to provide employees with up to 7 days (56 hours) of paid sick leave annually. The rule affects contractors entering into new contracts on or after January 1, 2017 that are covered by the Service Contract Act, the Davis-Bacon Act, or the Fair Labor Standards Act, concessions contracts, and service contracts in connection with federal property or lands. These contractors will need to include a new contract clause in applicable solicitations and government contracts, included as Appendix A to the Proposed Rule.
Under the new rule, employees must be allowed to earn paid sick time at a rate of 1 hour for every 30 hours worked. This mirrors many recently enacted state and municipal sick time laws across the country. However, accruals may not be capped at less than 56 hours, an amount that is higher than required by some jurisdictions, including Massachusetts and California.
The Proposed Rule provides that sick time must be made available for absences due to the employee’s own physical or mental illness, injury or medical condition, and for obtaining diagnosis, care or preventative treatment for the employee, as well as for caring for family members for the same reasons, and for absences relating to domestic violence, sexual assault or stalking (including for medical, legal and other needs that may arise in those circumstances). In a departure from some existing state and local laws, however, the definition of a family member is quite broad, and includes not only children, parents, spouses and domestic partners, but also “any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”
The new federal contractor requirement also has some of the same aspects of other sick time laws that are most likely to cause problems in administration, such as allowing employees to use sick time in 1-hour increments, requiring carryover of unused hours from year to year, requiring reinstatement of unused time following interruptions in service of up to 12 months, and requiring sick time to be granted even if the employee provides little or no prior notice.
Due to the rash of activity in this area in recent years, many employers have already implemented paid sick time policies, while others have had comprehensive PTO policies for some time. The Proposed Rule permits existing sick time, PTO or other time off policies to substitute for the new paid sick time requirement so long as those policies meet the minimum standards of the new rule. Employers that plan to rely on existing policies to meet the new requirements should consult with experienced employment counsel to assess whether they fully meet the new requirements. The good news is that employers will have until January 1, 2017 to implement compliant policies. The Wage and Hour division invites comments on the proposed rule until March 28, 2016.