We recently learned that President Obama plans to issue an Executive Order mandating paid sick leave for employees of federal contractors and subcontractors. This comes as no surprise as the President has utilized his power over the contracting community in recent years to further his policy goals that have stalled in Congress (such as increasing the minimum wage of federal contractors to $10.10 per hour and prohibiting discrimination based on sexual orientation and gender identity). We took a look at the proposed Executive Order. Here are the key takeaways:

• Contractors would be required to provide a minimum of 56 hours of paid sick leave per year and employees would be able to accrue at least 1 hour of paid sick time for every 30 hours worked. Any accrued paid sick time would carry over from year to year.
• Paid sick leave could be used for an employee’s medical condition, obtaining care from a doctor, or caring for a child, parent, spouse, domestic partner, “or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.” While the Executive Order is still in draft form, it seems that one could arguably take paid sick leave to care for a close friend.
• Paid sick leave could also be used for absences “resulting from domestic violence, sexual assault, or stalking, if the time absent from work is to seek medical attention, obtain counseling, seek relocation, seek assistance from a victim services organization, or take related legal action, including preparation for or participation in any related civil or criminal legal proceeding.”
• Employers paying employees fringe benefits under the Service Contract Act and Davis-Bacon Act would not be able to receive credit toward prevailing wage or fringe benefit obligations by providing sick leave to satisfy the Executive Order.
• Contractors would only be able to require certification from an employee (such as a doctor’s note) if 3 or more consecutive workdays were missed.
• Here is one employer-friendly provision: contractor’s would have no obligation to pay out the value of unused sick time to employees upon separation of employment.
• Detailed regulations would be issued by the Department of Labor no later than September 30, 2016.

Will this Order apply to your company? If you have federal service or construction contracts or subcontracts, the answer is almost definitely yes. However, (like with the Executive Order mandating a $10.10 minimum wage for employees of federal contractors), it does not appear that this Order is drafted to apply to manufacturers of materials and supplies.

We stress that the above anakysis is based off of a draft Executive Order obtained by The New York Times. While it seems likely that the President will soon issue an Executive Order, nothing is set in stone. The new regulations would go into effect on January 1, 2017, just 20 days before the end of President Obama’s second term.

We’ll keep you updated. Stay tuned. In the meantime, if you have concerns, please consider contacting your local Chamber of Commerce, Representative, or Senator.