Federal contractors need to be prepared to comply with 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 Jan. 1, 2017.
While it was anticipated that the new Administration would rescind this rule, that has not occurred, nor is there any indication that it will happen soon. Accordingly, federal contractors should prepare to comply with the Department of Labor’s (DOL) final rule.
Contractors who disregard the new requirements can be subject to debarment, among other penalties. The rule implements Executive Order 13706, which requires contractors that are working on federal contracts to provide paid sick leave to certain employees.
In general, the rule:
- Requires that employees of contractors, or subcontractors, working on, or in connection with, federal contracts accrue not less than one hour of paid sick leave for every 30 hours worked.
- Allows contractors to limit sick leave accrual to 56 hours (i.e., 7 days) per year, but requires contractors to carry over an employee’s unused sick leave into the next year.
- Does not require contractors to pay out accrued but unused sick leave when an employee separates from employment. It does require contractors to reinstate an employee’s accrued sick leave if an employee is rehired by a covered contractor within 12 months of separation.
- Allows employees to use their paid sick leave only when working on a covered contract to care for their own physical or mental health and also to care for sick children, parents, spouses or partners, and for circumstances related to domestic violence, sexual assault, or stalking.
To assist contractors in complying with this rule, SMACNA has prepared the document “Understanding the DOL’s Rules on Paid Sick Leave for Federal Contractors” available on SMACNA’s labor relations webpage.