DOL: Paid Sick Leave for Workers on Federal Contracts

September 30, 2016Articles

The U.S. Department of Labor released its Final Rule yesterday requiring federal contractors1 provide at least seven days of sick leave to their employees. The Final Rule implements Executive Order 13706, signed by President Barack Obama in September 2015. The following is a general overview of the 466 page rule.

  1. Length of Paid Sick Leave
    Employees will accrue one hour of paid sick leave for every 30 hours worked on or in connection with a covered federal contract. The paid leave must be allowed to accrue to at least 56 hours, or 7 days, in a year, or at any point in time.
  2. Use of Paid Leave
    Employees may use the paid leave in connection with their own illnesses or health care needs, including preventative care; the care of family member or loved one who is ill or needs health care, including preventative care; or purposes resulting from being the victim of domestic violence, sexual assault, or stalking, or to assist a family member who is such a victim (which includes time required to pursue legal action or to seek relocation services). Employees can use as little as an hour of paid sick leave or as much as all of paid sick leave they have accrued at one time.
  3. Carry-over and Cash-out
    Employees can carry-over up to 56 hours (7 days) of unused paid leave from year to year. Employers are required to reinstate paid leave for employees rehired by a covered contractor within 12 months after a job separation with the same company. However, employers are not required to pay employees for any unused paid sick leave when they leave their jobs.
  4. Existing Paid Leave Policies
    An employer’s existing paid time off policy may fulfill its paid sick leave obligations under the Final Rule if the policy provides employees with at least the same rights and benefits as the Final Rules.
  5. Anti-discrimination and Anti-retaliation
    Employers may not interfere with the accrual or use of paid sick leave and may not discriminate or retaliate against any employee for his or her use or attempted use of paid sick leave.

The Department of Labor has the authority to investigate violations of the Final Rule, including potential interference, discrimination, retaliation claims, and failure to meet the Rule’s requirements. The consequences of violating the rule include suspension and debarment from federal contracting. Consequently, it is imperative that employers comply with the Final Rule.

Contact the authors or your Dinsmore attorney with questions related to compliance with the Final Rule.


1 The Final Rule applies to contracts where the solicitation for such federal contract has been issued or the contract has been awarded outside the solicitation process on or after January 1, 2017 that are covered by the Service Contract Act or the Davis-Bacon Act, concessions contracts and service contracts in connection with federal property or land. Note, the Final Rule does not apply to employees working on contracts covered by a collective bargaining agreement that provides at least 56 hours of paid sick time or paid time off that can be used for health-related reasons until January 1, 2020 or the date the collective bargaining agreement terminates, whichever is sooner.