President Obama Issues Executive Order Mandating Paid Sick Leave
On September 7, 2015 (Labor Day), President Obama signed Executive Order 13706, which will require federal contractors to provide their employees with paid sick leave. The White House estimates that the new rule will benefit approximately 300,000 workers. The Executive Order also urges Congress to pass the Healthy Families Act, which would require all businesses with 15 or more employees to offer up to 7 paid sick days each year, so that all employees would get similar benefits.
Under the Executive Order, all employees working under a federal contract or subcontract must earn at least one hour of paid sick leave for every 30 hours worked. Under this calculation, employees may accrue up to 56 hours (or seven days) of paid sick leave per year. Contractors, however, are free to offer more generous leave at their discretion.
The order affects most procurement contracts or contract-like instruments where the solicitation has been issued on or after January 1, 2017. This means that contractors have over a year to prepare for the new obligation.
What Type of Absences Qualify for Paid Sick Leave?
Paid sick leave earned under the Executive Order may be used by an employee for an absence resulting from:
(i) physical or mental illness, injury, or medical condition;
(ii) obtaining diagnosis, care, or preventive care from a health care provider;
(iii) caring for a child, a parent, a spouse, a domestic partner, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship who has any of the conditions or needs for diagnosis, care, or preventive care described in paragraphs (i) or (ii) or is otherwise in need of care; or
(iv) domestic violence, sexual assault, or stalking, if the time absent from work is for the purposes otherwise described in paragraphs (i) and (ii), to obtain additional counseling, to seek relocation, to seek assistance from a victim services organization, to take related legal action, including preparation for or participation in any related civil or criminal legal proceeding, or to assist an individual related to the employee for any of these purposes.
Paid sick leave would be carried over from year to year, and must be reinstated for employees rehired by a covered contractor within 12 months after a job separation.
The Executive Order states that in order to receive the paid sick leave time, the employee must submit a written or oral request for the leave at least seven (7) calendar days in advance when the need for leave is foreseeable, and as soon as practicable if the leave is unforeseeable.
A contractor may only require a doctor’s note supporting the need for leave if the absences will be for three (3) or more consecutive workdays. In that case, the employee must provide the certification within 30 days of the first day of the leave. For leave due to domestic violence, sexual assault, or stalking, contractors should only ask for the minimum necessary information establishing the need for the employee to be absent. The employer must maintain confidentiality about the domestic violence, sexual assault, or stalking unless the employee consents or when disclosure is required by law.
No Payment Upon Separation
The Executive Order makes clear that employees are not entitled to payment for any accrued but unused sick leave upon separation, but notes that any unused leave is subject to reinstatement if the employee returns to work within 12 months.
What About Your Existing Leave Policies?
A contractor with an existing paid sick leave program would be able to count such program toward compliance with the new rule if the amount of paid sick leave meets the requirements of the Executive Order (i.e., at least seven days of paid sick leave), and it can be used for the same purposes as required by the Executive Order. For most employers, the latter may be the most challenging, as many employers do not allow for sick leave to be used for domestic violence, sexual assault, or stalking issues, unless there is a medical need for the leave.
What Do You Do Now?
The DOL has been instructed to issue regulations related to the paid sick leave obligations within 60 days. Those regulations will (hopefully) provide contractors with additional guidance on how to implement a paid sick leave program that comports with their new obligations.
In the meantime, if you do not already offer some form of paid sick leave (or PTO), you should consider these new obligations as you prepare your budgets. If you plan to use an existing paid leave program, consider whether revision is necessary to cover the domestic violence, sexual assault, and stalking scenarios. Finally, remember that these obligations do not go into effect until you enter into a new federal contract or subcontract after January 2017.