Sheet metal & Air Conditioning Contractors’ National Association

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Are Employees Performing Pre-fabrication Work Entitled to Sick Leave Under the Sick Leave Rules for Federal Contractors?


New federal contracts are now subject to the U.S. Department of Labor’s final rule “Establishing Paid Sick Leave for Federal Contractors.” The rule, established by the department’s Wage and Hour Division, went into effect for most federal contracts entered into on or after January 1, 2017. This means contractors must now determine which workers are entitled to accrue sick leave. One question recently posed was, how are workers performing pre-fabrication or assembly work to be treated? 

The rule’s accrual requirements apply only to employees who are directly engaged in performing the specific work called for by the contract or who otherwise spend more than 20% of their hours in a workweek performing work duties in connection with the performance of the covered contract.

But what of employees performing pre-fabrication and/or assembly of materials that will be erected and/or installed on a covered contract? Is that considered work “in connection with” a covered contract?

It depends on whether those employees are employed directly by the prime contractor that is party to the covered contract, or whether they are employed by a subcontractor who merely supplies material, and whose employees do not work on-site.

In the case of a subcontractor that is only supplying pre-fabricated and/or assembled material, and whose employees do not work on-site, the subcontractor’s employees are not eligible for accrual because the subcontract itself is not a covered contract under the new rule.

However, for employees of a contractor who performs on-site work, but who also has employees working off-site pre-fabricating and/or assembling material that will later be erected and/or installed on-site of the covered contract, the DOL explains that those employees of the prime contractor should be considered working “in connection with” a covered contract, and eligible for accrual if that pre-fabrication and/or assembly time accounts for more than 20% of their workweek hours. For more information on the rule, please see SMACNA’s “Understanding the DOL’s Rules on Paid Sick Leave for Federal Contractors,” available on SMACNA’s labor relations webpage.