President Obama has signed a new Executive Order (E.O.) that will require many federal contractors and subcontractors to offer a paid sick leave program to all employees performing work under covered contracts, beginning with contracts entered into or modified after January 1, 2017.
E.O. 13706 will require covered contractors and subcontractors to allow eligible employees to accrue one hour of paid leave for every 30 hours worked, up to a maximum of 56 hours per year, for themselves or a family member (defined broadly). Employees would be allowed to carry over unused leave, but the E.O. specifically provides that contractors are not required to pay out any unused leave. The Order also states that existing leave policies that provide the same or better benefits will be deemed to satisfy the requirements of the Order.
Contract coverage mirrors that in President Obama’s earlier minimum wage Executive Order, including Procurement contracts for services or construction; contracts or contract-like instruments for services covered by the Service Contract Act; contracts or contract like instruments for concessions; and contracts or contract like instruments entered into with respect to federal property and related to offering services for federal employees, their dependents, or the general public. Contracts for supplies or materials are not covered by the new E.O.
As is the case with the minimum wage E.O., the new paid sick leave E.O. delegates enforcement to the Department of Labor, which is charged with issuing implementing regulations by September 30, 2016.