Final Rule Issued on Paid Sick Leave for Federal Contractors

The U.S. Department of Labor recently announced the publication of a Final Rule to implement Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors.
EO 13706 requires certain parties that contract with the federal government to provide their employees with up to 56 hours of paid sick leave annually or be given that same amount in a lump sum at the start of a designated leave year.
Workers can use the leave to care for themselves or a family member, even for routine checkups.
They can also use their paid sick leave in the event of domestic violence, sexual assault, or stalking.
When fully implemented, the final rule:

• Provides up to 56 hours of paid sick leave per year to an estimated 1.15 million employees of federal contractors.
• Ensures that employers have choices in how to best adapt the paid sick leave requirement to their businesses. For example, employers can choose to allow workers to accrue leave over time, or to frontload leave for ease of administration.
• Includes flexibilities related to integration with employers’ existing paid time off policies and leave provisions in existing collective bargaining agreements.

What Contracts Are Covered?

The rule applies to all covered contracts solicited and awarded on or after Jan. 1, 2017.
Under the EO and Final Rule, the paid sick leave requirements apply to a new contract that is:

• A procurement contract for construction covered by the Davis-Bacon Act
• A contract for services covered by the Service Contract Act
• A contract for concessions, including any concessions contract excluded from coverage under the SCA by Department of Labor regulations at 29 CFR 4.133(b)
• A contract in connection with federal property or lands and related to offering services for Federal employees, their dependents, or the general public.

The regulations do not apply to contracts for the manufacturing or furnishing of materials, supplies, articles, or equipment to the federal government that are subject to the Walsh-Healey Public Contracts Act.
In addition, the final rule applies only to contracts, or portions of contracts, with the federal government performed within the United States (defined as the 50 States and the District of Columbia).
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