The Rule of 7: President Obama Signs New Executive Order Requiring Paid Sick Leave for Federal Contractors

Image courtesy of Newsweek.

Image courtesy of Newsweek.

On Labor Day 2015, President Obama continued his ambition to leave a legacy by signing a new controversial Executive Order.  This Executive Order requires federal contractors to offer covered employees 7 days of paid sick leave.  Key word: PAID.  The President then encouraged Congress to pass similar legislation requiring paid sick leave for all private-sector employees (cue Republican heartburn). Such legislation would finally put the U.S. on the map of industrialized nations requiring paid sick leave.  To put it in perspective, of the 22 wealthiest countries in the WORLD, the U.S. is the only one without paid sick leave.

Here is a breakdown of what you need to know:

  • The new Executive Order requires federal contractors to offer at least 7 days of earned sick leave.  This leave must be paid based on the worker's salary, hourly rate, or prevailing wage.
  • This paid leave will be available for: physical or mental illnesses, injuries, or medical conditions; obtaining a diagnosis or preventative care; the care of a parent, child, spouse, partner, or blood family member; and absences due to dometic abuse, sexual assault or stalking.
  • If the workers uses 3 consecutive days of paid sick leave, the federal contractor can require a medical certification from a physician.
  • Use of this required paid sick leave cannot be made contingent on finding a replacement worker. 
  • Federal contractors can require a 7 day notice period, if the notice is practicable under the circumstances (e.g. advance notice for a known doctor's appointment = ok; advance notice for having the flu = not ok).
  • If the worker does not use all 7 days of paid sick leave, it will carry over from year to year BUT federal contractors are not required to pay out any accrued sick days upon a worker's separation of employment (unless you have a policy stating otherwise).
  • This new requirement is in addition to similar requirements under the Davis-Bacon Act and the Service Contract Act and these required sick days cannot be used as a credit towards fringe benefit obligations under these or similar acts. 
  • Federal contractors with existing paid leave policies that apply to all employees will satisfy this Executive Order so long as the same requirements are met (e.g. the amount of paid leave is at least 7 days, etc).
  • Federal contractors are expressly forbidden from retaliating or discriminating against a worker who requests use of his or her paid sick leave. 

Although this Executive Order will only apply to federal contracts initiated on or after January 1, 2017, federal contractors should consider preparing for this change now as opposed to December 31, 2016.  Perhaps in the near future, private-sector employers can begin making similar changes to their leave policies for the 40% of private sector employees without access to paid sick leave.  #LEADONLEAVE