DOL Establishes Rule Implementing Paid Sick Leave for Federal Contractors

DOL Establishes Rule Implementing Paid Sick Leave for Federal Contractors

Recently, the Department of Labor (DOL) issued and established the proposed rule that implements the Executive Order (EO) 13706, which establishes paid sick leave for federal contractors. The DOL estimates that the order will provide paid sick leave to about 828,000 employees of federal contractors as well as 437,000 employees that currently receive no paid sick leave at all. All covered contractors will be required to carry extensive record keeping as well as administrative burdens.

Flu cold or allergy symptom. Closeup of sick young woman girl with fever sneezing in tissue. Health care. Studio shot. Black and white photo.The order will require covered contractors to allow those employees covered to accrue at least one-hour of paid sick leave for every 30 hours that they work with a minimum of 56 hours per year. The covered contracts include service contracts that are covered by the Service Contract Act (SCA), Davis Bacon Act (DBA), concessions contracts, and contracts with federal Government regarding federal property related to offering services to federal employees including their dependents or general public. The new order has set a variety of permissible uses for leave that include preventive care, illnesses, preventive and treatment care for family, seeking/providing assistance for domestic violence, sexual assault, or stalking. The rule adds new or extended requirements that warrant contractor’s attention. This includes interaction with SCA, DBA and other laws, covered employees, carryover/payout/reinstatement, administration of sick leave requests, employee notices, record keeping, conditions of payment, and definitions.

The proposed rule states that contractors are not allowed to count required sick leave as a bona fide fringe benefit under the SCA or DBA. Any sick leave that is provided above the minimum is able to be counted as bona fide fringe benefits. The proposed rule also covers both employees performing services under covered contracts and employees who spend a minimum of 20% of their workweek by performing services of those covered contracts. The rule requires applying the 20% limit on workweek-by-workweek basis. The rule also covers employees that are exempt from overtime and minimum age requirements by the Fair Labor Standards Act (FLSA). The proposed rule now requires contractors to accept employees to carry over accrued sick-leave days year to year, although, the rule makes it accessible for contractors to limit the number to total accrued employee hours available on a one-time basis. In regards to administration of sick leave requests, the rule requires speedy responses to employee’s requests for sick leave. Under the new rule, contractors are required to update employees on accrued sick-leave balances on a rolling basis. The contractors have to provide written notices once a month when employees request sick leave, balance updates, termination of employment, or when sick leave balance is reinstated.

Regarding record keeping, contractors are required to retain wage and timekeeping records of the following for 3 years after a covered contract: copies of all hours notices, copies of leave requests, written denial copies, and accrued leave balance records. Within the new rule, compliance is now a condition of contract payment. This allows False Claim Act liabilities or other liabilities to be set up for non-compliant contractors. Various provisions were added within the proposed rule that expands the order’s provisions for circumstances that the employees can utilize sick leave, how their leave requests can be processed, and how records should be kept. The DOL intends for contractors to apply rule requirements in ways not practiced by other federal and state laws or regulations. As an example, employers have to grant sick leave for employees to care for a sick child. The rule defines a child as a biological, adopted, step, or foster child.

Source: Wiley Rein LLP | DOL Proposes Rule Implementing Paid Sick Leave Executive Order

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