While you were soaking in the final days of summer this Labor Day, President Obama used the occasion to sign Executive Order (EO), “Establishing Paid Sick Leave for Federal Contractors.”  The EO provides that, beginning on January 1, 2017, executive agencies include a provision in new contracts, contract-like instruments and solicitations, requiring Federal Contractors provide 1 hour of sick leave for ever 30 hours worked by an employee. The EO tasks the Secretary of Labor with issuing regulations on or before September 30, 2016.

Contractors can expect the following requirements to be included in the regulations: 

1. Accrual of sick leave cannot be capped at less than 56 hours per year and must be carried forward from year to year,
2. No pay out of accrued sick leave is required at employment termination,
3. Paid sick leave can be used by employees for illness, preventative care, caring for a family member, or domestic abuse or sexual assault, including associated counseling and legal services,
4. Sick leave must be provided with a notice of seven calendar days if the leave is foreseeable and otherwise as soon as practicable,
5. A physician’s certification cannot be required for absences of less than 3 consecutive days,
6. The sick leave must be provided in addition to any leave required by the Service Contract Act or the Davis-Bacon Act, 
7. Employer’s who currently have a paid time off (PTO) policy can continue to use their PTO policy so long as the policy meets all of the requirements of the EO, and
8. Employers must flow down the applicable Federal Acquisition Regulation to subcontractors at any tier.

The EO follows on the heels of a momentum in support of paid sick leave initiatives across the country. Among the states that have already passed and/or implemented paid sick leave laws are California, New Jersey, Connecticut, Washington, and the District of Columbia. Additionally, some counties and municipalities have also gotten into the sick leave game, including Montgomery County, Maryland.

As more jurisdictions implement sick leave requirements and federal contractors look ahead to proposed rules with regard to the EO next year, it will be important to understand the requirements for jurisdictions applicable to your work force to ensure your sick leave policies comply with federal, state and municipal requirements.